EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703107
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.
Eddy Brewer (Sales) Proprietary Limited applied for a TCO in respect of certain hand held shower heads on 27 February 2007.
Instrument
TCO No 0703107 was made on 18 May 2007. It declares that those certain hand held shower heads 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. 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. 0703107 is taken to have come into force on 27 February 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 imposition of customs duties on imported goods, among other functions. It was introduced to address the need for a structured system to regulate and tax imported goods entering the country. Part XVA of the Customs Act facilitates the creation of Tariff Concession Orders (TCOs), which can lower the customs duty on specific goods, thereby addressing economic and trade policy objectives. The explanatory statement for Tariff Concession Instrument No. 0703107 clarifies the process whereby Eddy Brewer (Sales) Proprietary Limited successfully applied for a TCO for certain handheld shower heads, effectively reducing the duty on these goods from 5% to free. This instrument demonstrates the Act’s flexibility in responding to specific trade-related requests while maintaining a consistent regulatory framework.
Scope and Application
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) can be implemented to offer reduced customs duty rates on certain goods. Specifically, Part XVA of the Act allows the Chief Executive Officer of Customs (CEO) to grant tariff concessions if certain criteria are met, such as the absence of substitutable goods produced in Australia. The process involves an application to the CEO, followed by a determination based on the core criteria outlined in the Act. If the application meets these criteria, the CEO must issue a written order, which is then published in the Gazette, inviting submissions from interested parties. This particular legislation, Tariff Concession Instrument No. 0703107, pertains to a specific case where Eddy Brewer (Sales) Proprietary Limited applied for and was granted a TCO for certain hand held shower heads, resulting in a reduction of the customs duty rate from the general rate of 5% to free. The TCO applies to these specified goods and takes effect from the date the application was lodged, without retroactively affecting the rights of any party or imposing new liabilities.
Key Provisions
The Tariff Concession Order No. 0703107 under the Customs Act 1901, specifically part XVA, pertains to the application of lower rates of customs duty on certain goods, namely handheld shower heads, as applied by Eddy Brewer (Sales) Proprietary Limited. This concession is contingent upon the absence of substitutable goods produced in Australia, as outlined in sections 269C and 269D of the Act. The CEO of Customs, upon reviewing the application, must ascertain that the goods in question meet the core criteria stipulated in section 269F, which involves no production of substitutable goods in Australia. If the application aligns with these criteria, the CEO is mandated to issue a written order declaring the goods eligible for a reduced customs duty rate as per item 50 of Schedule 4 to the Customs Tariff Act 1995. This results in the general duty rate of 5% being waived for the specified handheld shower heads.
Entities and individuals subject to the Act must adhere to the provisions outlined, particularly in ensuring that any goods for which a Tariff Concession Order is sought do not have substitutable alternatives produced within Australia. They must also comply with the notification requirements, such as the CEO’s obligation to publish a notice in the Gazette inviting submissions from the public if they believe the TCO should not proceed. The TCO will come into force on the date the application is lodged, as specified in subsection 269S(1) of the Act, which in this case is 27 February 2007. Importers of the specified goods can benefit from the reduced duty rate and are entitled to apply for refunds on duties paid on imports since the TCO's effective date.
Failure to comply with the Act's requirements can result in legal consequences. Specifically, the Act does not provide explicit details on the penalties for non-compliance in this context, but general non-compliance with customs regulations can result in substantial fines or imprisonment. For example, under section 268 of the Customs Act 1901, penalties for importing goods without the necessary permits or paying applicable duties can incur fines of up to 10,000 penalty units or imprisonment for up to 10 years, or both, depending on the severity of the breach. Additionally, there are civil penalties for false statements or misleading information provided to the CEO, which could further compound the legal ramifications for non-compliance.