EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0706123
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.
Thermos Pty Ltd applied for a TCO in respect of certain drink bottle coolers on 26 April 2007.
Instrument
TCO No 0706123 was made on 6 July 2007. It declares that those certain drink bottle coolers 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. 0706123 is taken to have come into force on 26 April 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 Tariff Concession Instrument No. 0706123 was enacted under the Customs Act 1901 to address the issue of applying for tariff concessions on specific goods. This piece of legislation was introduced to facilitate the reduction of customs duties on particular goods, thereby benefiting importers and potentially stimulating trade. Enacted by the Chief Executive Officer of Customs, this instrument aims to streamline the process by which businesses can apply for and receive tariff concessions, provided the goods in question are not produced domestically and no suitable substitutes are available. The policy objective is to encourage the importation of specific goods by reducing their duty rates, which can in turn benefit consumers and businesses by lowering costs.
The instrument came into force on 26 April 2007, the date on which Thermos Pty Ltd applied for the tariff concession on certain drink bottle coolers. The application was successful as the CEO determined that no substitutable goods were produced in Australia. This concession resulted in a reduction of the duty rate from 5% to 0% for these goods, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument also ensures that the rights of importers are positively affected, allowing them to apply for duty refunds on goods imported since the concession took effect.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the application of Tariff Concession Orders (TCOs), which are utilised to provide lower rates of customs duty on certain goods. The Act applies to any person or entity that seeks a tariff concession for goods that are not specified in section 269SJ of the Act, which excludes certain types of goods from the concession. The process involves an application to the Chief Executive Officer of Customs (CEO) who, if satisfied that the application meets the core criteria set out in section 269C of the Act, will make a TCO. The CEO must consider whether no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. A TCO can alter the rate of duty applicable to specific goods, as demonstrated in the case of Thermos Pty Ltd's application for certain drink bottle coolers, where the duty rate was reduced from 5% to 0%. The geographic reach of the Act is national, as it pertains to the Commonwealth of Australia, and the application process involves publishing a notice in the Gazette to invite any interested parties to make submissions, although no submissions were received in this instance. The TCO does not affect pre-existing rights or impose liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0706123 under the Customs Act 1901 (section 269F) outline the process for applying for and granting a Tariff Concession Order (TCO). This involves an application to the Chief Executive Officer of Customs (section 269F), who must determine whether the goods in question meet the core criteria for a TCO. Specifically, section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) then mandates that if these criteria are met, a written order must be made, declaring that the goods are subject to a prescribed rate of duty specified in the order. This particular TCO, No. 0706123, applies to certain drink bottle coolers, reducing the duty rate from the general rate of 5% to 0%.
The obligations and requirements imposed by the Act on the parties involved, particularly Thermos Pty Ltd, are primarily procedural. Thermos Pty Ltd must submit an application to the CEO of Customs, ensuring it adheres to the criteria set out in section 269C. Additionally, the CEO is required to publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any interested parties. The CEO must also decide on the application within the stipulated timeframe and, if satisfied, issue a written TCO. The CEO, in this case, did not receive any submissions opposing the TCO. The TCO, once made, affects the rights of importers beneficially, allowing them to apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).
In terms of offences, penalties, or consequences for breach, the Act does not specify particular offences related to the application or misuse of a TCO. However, any misuse or fraudulent application could potentially lead to civil or criminal penalties under other relevant sections of the Customs Act 1901 or other applicable legislation. For instance, providing false information in an application could be considered an offence under general fraud provisions, attracting appropriate penalties. The specific penalties would depend on the nature and severity of the breach, but they could include fines or imprisonment, depending on the jurisdiction and the specifics of the case.