EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716485
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.
Hobart Food Equipment Pty Ltd applied for a TCO in respect of certain catering equipment trolleys carts washing machines on 06 September 2007.
Instrument
TCO No 0716485 was made on 30 November 2007. It declares that those certain catering equipment trolleys carts washing 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. 0716485 is taken to have come into force on 06 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 Tariff Concession Instrument No. 0716485, enacted in 2007 under the Customs Act 1901, addresses the need for tariff concessions for specific goods that are not produced in Australia. This legislative instrument was introduced to streamline the process by which the Chief Executive Officer of Customs can grant lower rates of customs duty on goods that do not have Australian-made substitutes. The Customs Act 1901 provides the framework for Tariff Concession Orders (TCOs), which reduce duty rates if no substitutable goods are produced domestically. The policy objective of this particular Instrument is to benefit importers by allowing them to apply for refunds of duty on goods imported from the date the TCO was deemed to have come into effect, without imposing any liabilities on them. This measure ensures that importers are not disadvantaged and can take advantage of the reduced duty rates provided by the TCO.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at applying lower rates of customs duty on specific goods. This legislative framework applies to any person who may submit an application for a TCO in respect of goods, provided that the goods do not fall under the categories specified in section 269SJ of the Act which are ineligible for tariff concessions. The Act's application is national in scope, applying throughout Australia under the authority of the Commonwealth. The process involves an assessment by the CEO to determine if the application meets the core criteria, which includes ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. Once a TCO is issued, it provides relief from the general rate of duty, as demonstrated in TCO No. 0716485 concerning certain catering equipment. Importantly, the TCO does not retroactively affect any rights or impose new liabilities on any person other than the Commonwealth, thereby ensuring that the rights of importers are advantageously impacted from the date the TCO takes effect.
Key Provisions
The Customs Act 1901, as amended, includes provisions under which the Chief Executive Officer of Customs (CEO) can make Tariff Concession Orders (TCOs) (sections 269C and 269F). When an application for a TCO is made, the CEO must assess whether it meets the core criteria set out in section 269C. For the application to meet these criteria, it must be established that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the CEO determines that the application meets the criteria, they are required to make a written TCO, specifying the lower customs duty rate that will apply to the goods in question (section 269P(3)).
The obligations under this legislation require applicants to ensure their submissions are made in good faith and supported by evidence that no substitutable goods are being produced domestically. The CEO has an obligation to publish a notice in the Gazette inviting any interested parties to submit objections or concerns regarding the application (subsection 269K(1)). If no objections are received, the CEO proceeds to issue the TCO. Importers, once the TCO is in effect, have the right to apply for a refund of any customs duties paid on the goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).
Failure to comply with the requirements set out in the Customs Act 1901 can lead to civil or criminal consequences. For instance, providing false information in an application for a TCO may be considered an offence under section 277 of the Act, potentially resulting in penalties. The maximum penalties for offences under the Customs Act can include fines of up to $22,200 for individuals and $111,000 for corporations, depending on the severity and circumstances of the breach. Additionally, the Act allows for the imposition of imprisonment for serious offences. The precise penalties are determined by the courts based on the specific nature of the breach.