EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713615
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.
Hy-Clor Australia Pty Limited applied for a TCO in respect of certain swimming pool cleaning machines on 29 August 2007.
Instrument
TCO No 0713615 was made on 23 November 2007. It declares that those certain swimming pool cleaning machines 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. 0713615 is taken to have come into force on 29 August 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 Australian Parliament, provides a framework for administering customs duties and facilitating international trade. One aspect of this framework is the Tariff Concession Orders (TCOs) scheme, established under Part XVA of the Act. This scheme enables the Chief Executive Officer of Customs to apply a lower rate of customs duty on certain imported goods, subject to specific criteria. The objective is to encourage the importation of goods that are not produced domestically, thereby fostering competition and potentially reducing consumer prices. Tariff Concession Instrument No. 0713615, made on 23 November 2007, is an example of this scheme in action. In this instance, Hy-Clor Australia Pty Limited applied for a TCO on certain swimming pool cleaning machines, which were granted a free duty rate as no substitutable goods were produced in Australia. This instrument was effective from 29 August 2007, the date of the application, and did not impose any liabilities or disadvantages to persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0713615 under the Customs Act 1901 applies to Hy-Clor Australia Pty Limited and its specific application for a Tariff Concession Order (TCO) concerning certain swimming pool cleaning machines. This instrument pertains to the eligibility of these machines for a tariff concession, effectively reducing the customs duty rate from 5% to free, provided that the application meets the core criteria as outlined in the Act. The scope of this legislation is limited to the particular goods specified in the application and is effective from the date the application was lodged, 29 August 2007. The geographic reach of the Act is national, applying across Australia as it is a Commonwealth Act. There are exclusions, as the Act specifies goods that cannot be subject to a TCO, and the CEO must ensure that the goods in question are not substitutable by products already manufactured in Australia. The application of the Act may be extended through subordinate instruments, but this particular instance does not extend beyond the specified goods and their duty concession.
Key Provisions
The Customs Act 1901 (the Act) enables the Chief Executive Officer of Customs (the CEO) to issue Tariff Concession Orders (TCOs) under section 269F. When an application for a TCO is made, the CEO is required to assess whether it meets the core criteria outlined in section 269C. This assessment is contingent on the goods not being produced in Australia in the ordinary course of business on the day the application was lodged, as defined by sections 269D, 269E and 269F. If the application meets these criteria, the CEO must issue a written TCO under section 269P(3). For example, Hy-Clor Australia Pty Limited successfully applied for a TCO for certain swimming pool cleaning machines on 29 August 2007. This was issued as TCO No. 0713615 on 23 November 2007, and declared that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general 5%.
The Act imposes certain obligations on both the CEO and the applicants for a TCO. The CEO must publish a notice in the Gazette inviting submissions from any interested parties as soon as practicable after accepting a TCO application as valid, as per section 269K(1). In the case of TCO No. 0713615, no submissions were received. The CEO must also ensure that the application meets the core criteria specified in the Act. Conversely, applicants must ensure their applications are complete and accurate to avoid delays or rejections.
Breaches of the provisions of the Customs Act 1901 can result in both civil and criminal consequences. For example, providing false information in a TCO application could lead to criminal charges under section 269T of the Act, with a maximum penalty of five years imprisonment. Additionally, any person found to have contravened a TCO could face civil penalties under section 270 of the Act. These penalties serve to ensure compliance with the Act and the integrity of the TCO process.