EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0717308
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 hot milk foamer dispensers on 11 October 2007.
Instrument
TCO No 0717308 was made on 30 January 2008. It declares that those certain hot milk foamer 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 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. 0717308 is taken to have come into force on 11 October 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, serves to regulate the importation and exportation of goods into and out of Australia, including the imposition and collection of customs duty. A significant component of this legislative framework is the provision for Tariff Concession Orders (TCOs) under Part XVA, which allows for the reduction or exemption of customs duty on specified goods. This legislative instrument was introduced to address the need for flexibility in tariff regulation to accommodate economic and trade policy objectives, such as supporting specific industries or responding to trade agreements. The objective of the TCO scheme is to provide a mechanism through which the Chief Executive Officer of Customs can adjust duty rates on goods under certain conditions, thereby promoting fair trade practices and economic efficiency. The instrument in question, Tariff Concession Instrument No. 0717308, was made to provide tariff concessions on certain hot milk foamer dispensers, illustrating the application of the TCO scheme in practice.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to any person or entity seeking to import goods into Australia, provided the goods in question do not fall under the restricted category specified in section 269SJ. A TCO application is subject to the core criteria stipulated in sections 269C, 269B, 269D, and 269E of the Act, which essentially determine whether substitutable goods are produced in Australia and whether such goods are produced in the ordinary course of business. If the CEO determines that the application meets these criteria, a TCO is issued, granting a lower customs duty rate on the specified goods. This mechanism ensures that the concession applies nationally, as the Act is a Commonwealth legislation. Notably, the TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on individuals or entities, thereby ensuring that no party is disadvantaged by the issuance of the TCO.
Key Provisions
The main provisions of Tariff Concession Instrument No. 0717308, made under the Customs Act 1901, include the declaration that certain hot milk foamer dispensers are subject to a lower rate of customs duty (section 269P(3)). This tariff concession order (TCO) applies to the goods specified in the application made by Oswald Agencies Pty Ltd on 11 October 2007. The instrument specifies that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free, as opposed to the general rate of 5% (subsection 269P(3)). This TCO came into effect on 11 October 2007, the date on which the application was lodged (subsection 269S(1)).
The obligations and requirements imposed by this TCO on the parties or entities it governs include the application process for tariff concessions, where a person must apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods (section 269F). The CEO must then assess whether the application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the application meets these criteria, the CEO is required to make a written order declaring the goods to which the prescribed tariff applies (subsection 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)).
In terms of offences, penalties, or consequences for breach, the Customs Act 1901 does not explicitly state specific offences or penalties for failing to comply with the requirements of a TCO. However, general provisions under the Customs Act may apply to breaches, potentially including civil or criminal penalties. For instance, section 228 of the Customs Act outlines various offences related to the importation of goods, including penalties for knowingly or recklessly making a false statement or representation in relation to the importation of goods, which could attract fines or imprisonment. The specific consequences for non-compliance with the terms of this TCO would depend on the nature of the breach and the relevant sections of the Customs Act that are applicable.
The TCO itself does not impose any liabilities on any person other than the Commonwealth, and it does not affect the rights of a person as at the date of registration to disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)). Importers of the specified goods will benefit from the ability to apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).