EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619385
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Hobart Food Equipment applied for a TCO in respect of certain flight type dishwashers on 5 December 2006.
Instrument
TCO No 0619385 was made on 26 April 2007. It declares that those certain flight type dishwashers are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is 0%.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. One submission objecting to the TCO application was received from Goldstein Eswood.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0619385 is taken to have come into force on 5 December 2006.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901, enacted by the Parliament of Australia, provides the legislative framework for the administration of customs and excise duties, and includes provisions for Tariff Concession Orders (TCOs). This legislation was introduced to address the need for tariff relief on certain imported goods that could not be produced domestically, thus promoting trade and economic efficiency. The Tariff Concession Instrument No. 0619385 was enacted to provide tariff concessions for specific flight type dishwashers, aiming to reduce the customs duty rate from 5% to 0%. The policy objective behind this measure is to facilitate the import of these goods, benefiting importers by potentially lowering their duty costs, while ensuring that no domestic industries are adversely affected by the concession.
Scope and Application
The Customs Act 1901, through Part XVA, provides a mechanism for the Chief Executive Officer of Customs (CEO) to grant Tariff Concession Orders (TCOs) which apply a lower rate of customs duty to specified goods. This process is available to any person who applies for such a concession, provided the goods in question are not those specified in section 269SJ of the Act that cannot be subject to a TCO. The CEO must ensure that the application meets core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business at the time of the application. The application of the Act is national, as it is a Commonwealth statute, and it does not discriminate between different entities or industries, applying uniformly to all who seek to benefit from a tariff concession. The Act extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the reduced duty rates for goods subject to a TCO. The Act does not disadvantage any person by affecting their rights as at the date of registration, ensuring that the TCOs do not impose any new liabilities or disadvantage anyone who acted prior to the registration of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901, specifically under Part XVA, concern Tariff Concession Orders (TCOs) (sections 269C, 269B, 269D, 269E, and 269P). Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods, provided the goods are not those specified in section 269SJ, which lists goods that cannot be subject to a TCO. For a TCO application to meet the core criteria, it must be established that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269B respectively. If the CEO is satisfied that the application meets these criteria, they must make a written order (a TCO) (section 269P(3)). The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties once a TCO application is accepted as valid (subsection 269K(1)).
The Customs Act imposes several obligations and requirements on parties or entities it governs. Firstly, any person can apply for a TCO for certain goods, provided these goods are not excluded under section 269SJ. The CEO must then evaluate whether the application meets the core criteria by confirming that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. If the CEO is satisfied with the application, they are mandated to make a TCO. Additionally, upon accepting a valid TCO application, the CEO must publish a notice in the Gazette inviting submissions from any interested parties. This ensures transparency and allows for objections to be raised against the TCO.
The legislation also outlines consequences for breaches, though it does not specify criminal offences or civil penalties. The primary consequence of non-compliance with the Act's provisions would be the failure to obtain the intended tariff concessions, potentially leading to higher customs duties. The TCO itself does not impose any liabilities on any person, other than the Commonwealth, and does not affect the rights of persons as at the date of registration so as to disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)). Importers can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
In summary, the Customs Act 1901 provides a structured process for applying for and granting Tariff Concession Orders, ensuring that the application meets specific criteria and allowing for public submissions. The Act mandates that the CEO must make a TCO if the application is valid and no substitutable goods are produced in Australia. The Act ensures that the rights of importers are beneficially affected and provides for the refund of duty on goods imported since the TCO's effective date. Breaches of the Act's provisions primarily result in the non-receipt of tariff concessions, with no specified criminal or civil penalties for non-compliance.