EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713886
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.
Oswald Agencies Pty Ltd applied for a TCO in respect of certain steam and hot water dispensers on 3 September 2007.
Instrument
TCO No 0713886 was made on 9 November 2007. It declares that those certain steam and hot 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. 0713886 is taken to have come into force on 3 September 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 the administration of customs and excise duties. The Act was introduced to address the need for a structured approach to the collection of customs duties and the regulation of imported goods. Part XVA of the Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, providing relief from certain customs duties for specified goods. The policy objective is to support Australian industry by ensuring that imported goods do not compete unfairly with locally produced alternatives. The Tariff Concession Instrument No. 0713886, which was made on 9 November 2007, exemplifies this by reducing the duty on certain steam and hot water dispensers from 5% to 0%, effective from the date the application was lodged on 3 September 2007. This reduction aims to assist importers and consumers by lowering the cost of these goods while ensuring that no locally produced substitutable goods were available at the time of the application.
Scope and Application
The Tariff Concession Instrument No. 0713886 applies to certain steam and hot water dispensers and is enacted under the Customs Act 1901. This legislation allows the Chief Executive Officer of Customs to reduce the customs duty rate for specific goods if certain criteria are met, such as the absence of substitutable goods produced in Australia. The instrument is applicable to entities or individuals importing these goods and effectively reduces the duty rate from 5% to 0% for the specified items, provided the application was lodged on or after 3 September 2007, the date from which the instrument is considered to have come into force. The instrument does not apply to goods specified in section 269SJ of the Act, which excludes certain items from tariff concessions. The instrument does not disadvantage any person or impose liabilities on anyone for actions taken before its effective date.
Key Provisions
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0713886, outlines the process for applying for and granting Tariff Concession Orders (TCOs) (s 269F). A TCO is a declaration by the Chief Executive Officer (CEO) of Customs that certain goods are eligible for a lower rate of customs duty. For the CEO to consider an application, it must not be in respect of goods specified in section 269SJ of the Act. The CEO must assess whether the application meets the core criteria set out in section 269C, which requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). If satisfied, the CEO must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (s 269P(3)).
In this case, Oswald Agencies Pty Ltd applied for a TCO in respect of certain steam and hot water dispensers on 3 September 2007. The CEO, satisfied that the application met the core criteria, issued TCO No. 0713886 on 9 November 2007, declaring that these dispensers are subject to a 0% duty rate, as opposed to the general rate of 5% (s 269P(3)). The TCO is considered to have come into force on the date the application was lodged, 3 September 2007 (s 269S(1)). The rights of importers will be beneficially affected, as they can apply for a refund of duty on goods imported since the effective date of the TCO (Reg 126(1)(r)). Importantly, the TCO does not impose any liabilities on any person, nor does it affect the rights of a person as at the date of registration to disadvantage them or impose liabilities in respect of anything done or omitted before the registration date.
The Act imposes certain obligations on applicants for a TCO. An applicant must ensure their application is not in respect of goods specified in section 269SJ and must provide all necessary information to satisfy the CEO that the application meets the core criteria (s 269C, s 269F). The CEO, in turn, has the obligation to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (s 269K(1)). If no submissions are received, the CEO must proceed to consider and, if satisfied, issue the TCO. The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth or impose liabilities on them in respect of anything done or omitted before the registration date (s 269S(1)).
Failure to comply with the requirements of the Act or the TCO may result in various penalties and consequences. For instance, if an applicant knowingly provides false or misleading information in their application, they may be subject to criminal penalties, including fines and imprisonment, as outlined in the relevant provisions of the Customs Act 1901 and the Crimes Act 1914. The maximum penalties for such offences can include substantial fines and imprisonment terms, depending on the severity of the offence. Additionally, any person who contravenes a TCO may face civil penalties, including fines, and may also be subject to criminal prosecution with associated penalties. The exact penalties depend on the specific provisions of the Act and any related legislation.