EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701496
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.
Nova Springwater Pty Ltd applied for a TCO in respect of certain water dispensers on 25 January 2007.
Instrument
TCO No 0701496 was made on 20 April 2007. It declares that those certain water dispensers 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. The CEO did not receive any submissions in response to this invitation.
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. 0701496 is taken to have come into force on 25 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, enacted by the Parliament of Australia, provides a framework for the administration of customs duties and the regulation of the importation and exportation of goods. The Act was introduced to address the need for a structured system to manage the collection of customs duties and to regulate the flow of goods across Australia’s borders. Specifically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, enabling a lower rate of customs duty on specified goods, provided certain criteria are met. The Tariff Concession Instrument No. 0701496, made on 20 April 2007, is an example of this mechanism in action, where a TCO was issued for certain water dispensers following an application by Nova Springwater Pty Ltd. The policy objective behind this TCO was to provide a tariff concession, reducing the duty on these goods from 5% to 0%, thereby promoting the importation of these items into Australia.
Scope and Application
The Tariff Concession Instrument No. 0701496 applies to the water dispensers specified in the instrument, granting them tariff concessions under the Customs Act 1901. This legislation is relevant to the entities or individuals who import these specific water dispensers, as it modifies the customs duty rate from the general 5% to 0%. The geographic reach of this Act is national, given it operates under the overarching framework of the Customs Act 1901, which applies throughout Australia. The act specifies that it does not apply to goods that are listed in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. The application and scope of the Act can be further defined or modified through subordinate instruments, which allow for specific adjustments or extensions in the application of tariff concessions. The commencement date of this particular instrument is 25 January 2007, the date on which the application was lodged, and it does not retroactively affect the rights of any person or impose liabilities for actions taken prior to its registration.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0701496 under the Customs Act 1901 (section 269F) establish the process by which Tariff Concession Orders (TCO) may be applied for and granted by the Chief Executive Officer of Customs (CEO) in relation to specified goods. Section 269C details the criteria that must be satisfied for an application to be considered, primarily ensuring that no substitutable goods are produced in Australia on the day the application is lodged. If these criteria are met, section 269P(3) requires the CEO to issue a TCO. In this specific case, TCO No. 0701496 pertains to certain water dispensers, declaring them to be subject to a 0% duty rate instead of the general rate of 5% (section 269P(3)).
The Act imposes certain obligations and requirements on the parties involved. An applicant, such as Nova Springwater Pty Ltd, must submit a valid application to the CEO, ensuring that it complies with the conditions stipulated in section 269SJ, which excludes certain goods from eligibility for a TCO. The CEO, upon receiving a valid application, must determine whether it meets the core criteria set out in section 269C and, if satisfied, issue a TCO as per section 269P(3). Additionally, as per section 269K(1), the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be granted. In this case, no submissions were received.
The Act also outlines consequences for non-compliance or breach of its provisions. While the explanatory statement does not detail specific offences or penalties under this TCO, general provisions within the Customs Act 1901 may apply. For instance, breaches of customs regulations can result in both civil and criminal penalties. Civil penalties could include fines, with the maximum penalty often tied to the value of the goods or the degree of the offence. Criminal penalties may involve imprisonment, depending on the severity and intent behind the breach. It is essential for parties to adhere to the provisions set forth to avoid these potential consequences.