EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713981
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 coffee machines on 31 August 2007.
Instrument
TCO No 0713981 was made on 16 November 2007. It declares that those certain coffee 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. 0713981 is taken to have come into force on 31 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 Tariff Concession Instrument No. 0713981, enacted under the Customs Act 1901, was introduced to address the need for facilitating the importation of certain goods by providing tariff concessions. The instrument was made on 16 November 2007, in response to an application by Oswald Agencies Pty Ltd for tariff concessions on specific coffee machines. The core objective of this instrument, as stated in the Act, is to allow the Chief Executive Officer of Customs to reduce the customs duty on goods if no substitutable goods are produced in Australia, thereby supporting the import of these specific goods at a lower duty rate. The instrument came into force on the day the application was lodged, 31 August 2007, and does not affect the rights of any person adversely, ensuring that importers of such goods can apply for a refund of duty from the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0713981 under the Customs Act 1901 applies to entities or individuals seeking tariff concessions on specific goods, namely certain coffee machines in this instance. The instrument was made by the Chief Executive Officer of Customs, who must assess whether an application for a Tariff Concession Order (TCO) meets the core criteria as specified in the Act. The application process involves determining if no substitutable goods are produced in Australia, which would make the goods in question eligible for a lower rate of customs duty. This concession is applicable from the date the application was lodged, which in this case was 31 August 2007, and it does not affect the rights of any person as at the date of registration. The TCO effectively provides free duty on the specified coffee machines, as opposed to the general rate of 5%. Notably, the instrument does not impose any liabilities on any person and allows importers to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0713981, under the Customs Act 1901 (the Act), outlines the provisions for a Tariff Concession Order (TCO) application, which reduces the rate of customs duty on specified goods. The CEO of Customs is empowered under section 269F to assess TCO applications for eligibility. If the CEO determines that the application meets the core criteria set out in section 269C and is not for goods excluded under section 269SJ, a TCO will be issued. This TCO, as specified in TCO No. 0713981, pertains to certain coffee machines and declares that these goods are subject to a duty-free rate.
The Act imposes certain obligations on the parties involved. Section 269K(1) mandates that the CEO must publish a notice in the Gazette after accepting a TCO application as valid, inviting any interested party to lodge a submission if they believe the TCO should not proceed. This notice period allows for public input and scrutiny. In this instance, no submissions were received by the CEO, leading to the issuance of the TCO. The commencement of a TCO, as provided under section 269S(1), is effective from the date the application is lodged, which, for TCO No. 0713981, is 31 August 2007. The rights of importers are protected under the Act, ensuring that the TCO does not disadvantage or impose liabilities on any person for actions taken before the TCO's effective date.
Failure to comply with the provisions of the Act or the terms of a TCO could lead to various consequences. The Act does not specify particular offences or penalties within the explanatory statement for non-compliance with the TCO. However, it is implicit that breaches of the Customs Act could result in legal actions, including fines and other penalties prescribed under the Act. The maximum penalties for breaches of customs laws can be significant and may include criminal charges for serious offences, reflecting the importance of adherence to the regulations governing customs duty concessions. Importers who comply with the TCO can benefit from duty refunds for goods imported from the effective date of the TCO.