EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701465
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.
L E Whittaker & Sons Pty Ltd applied for a TCO in respect of certain water hydration systems on 24 January 2007.
Instrument
TCO No 0701465 was made on 12 November 2007. It declares that those certain water hydration systems 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 free.
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 Adventure One Pty Ltd.
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. 0701465 is taken to have come into force on 24 January 2007.
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 was enacted to provide a comprehensive framework for the administration of customs duties in Australia, including the establishment of procedures for tariff concessions. The Act was introduced to address the need for a streamlined process to provide tariff relief on certain goods, ensuring that Australian businesses could compete effectively in the global market. This was achieved through the introduction of Tariff Concession Orders (TCOs), which allow for a lower rate of customs duty on specified goods under certain conditions. The enacting body for this legislation is the Parliament of Australia, with the policy objective being to promote fair trade and economic efficiency by reducing the cost of imported goods that have no domestic equivalent.
The Tariff Concession Instrument No. 0701465, published in 2009, is an example of the application of the Customs Act 1901, specifically under Part XVA, which deals with the making of TCOs. This instrument was introduced in response to an application by L E Whittaker & Sons Pty Ltd for tariff concessions on certain water hydration systems. Following the assessment by the Chief Executive Officer of Customs, the instrument was made, declaring that the specified goods were subject to a free rate of duty as no substitutable goods were produced in Australia. The process involved public consultation, as mandated by the Act, with submissions considered before the final decision was made. This instrument highlights the Act's intent to facilitate trade by providing necessary tariff relief while maintaining a transparent and inclusive decision-making process.
Scope and Application
The Tariff Concession Instrument No. 0701465 under the Customs Act 1901 applies to entities and individuals who are involved in the importation of certain water hydration systems, providing them with a lower rate of customs duty. The legislation was enacted to address a specific case where L E Whittaker & Sons Pty Ltd applied for tariff concessions on these goods, aiming to benefit the importer by reducing the duty rate from the general 5% to free. The application was processed by the Chief Executive Officer of Customs (CEO) and, after meeting the core criteria outlined in section 269C of the Act, a Tariff Concession Order (TCO) was issued on 12 November 2007. This order was effective from 24 January 2007, the date on which the application was lodged. The Act requires the CEO to publish a notice in the Gazette inviting submissions on the application, and while one objection was received from Adventure One Pty Ltd, the CEO proceeded to issue the TCO as no substitutable goods were produced in Australia. This concession does not affect existing rights or impose new liabilities on any person except the Commonwealth, and importers can apply for refunds of duty paid on these goods since the TCO's effective date.
Key Provisions
The main operative sections of this legislation revolve around the establishment and operation of Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows individuals or entities to apply to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods in question do not fall under the prohibited list outlined in section 269SJ. Section 269C sets the core criteria for the CEO to consider when deciding whether to approve a TCO application, which involves verifying that no substitutable goods are produced in Australia as of the date the application is lodged (section 269D and 269E). Once these criteria are met, section 269P(3) mandates that the CEO issue a written order declaring that the specified goods are eligible for the tariff concession.
In terms of obligations, the CEO is required to publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any interested parties who may have reasons to oppose the TCO application. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on them for actions taken prior to the TCO's effective date, as per subsection 269S(1). Importers, however, will be able to apply for duty refunds for goods imported since the date the TCO is deemed to have come into force, as outlined in paragraph 126(1)(r) of the Regulations.
Offences and penalties under this legislation are not explicitly detailed in the provided sections. However, non-compliance with the terms of a TCO or failure to adhere to the stipulated procedures for applying for or issuing a TCO could potentially lead to legal consequences. Given the regulatory nature of customs and tariffs, breaches may attract civil or administrative penalties, although specific penalties are not mentioned in the provided text. It is also possible that more severe penalties could be applied under broader provisions of the Customs Act 1901 or related legislation, depending on the nature and severity of the breach.