EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720053
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.
Kamado Cookers Australia applied for a TCO in respect of certain ceramic cooker on 21 November 2007.
Instrument
TCO No 0720053 was made on 08 February 2008. It declares that those certain ceramic cooker 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. 0720053 is taken to have come into force on 21 November 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, established a framework for the application and administration of customs duties and tariffs. One of the key instruments within this framework is the Tariff Concession Order (TCO), which provides for reduced rates of customs duty on specified goods under certain conditions. The problem this legislation addresses is the facilitation of the import of goods that are not produced domestically, thereby supporting economic efficiency and consumer choice. The objective is to encourage the importation of goods that are not manufactured in Australia, thus benefiting consumers and businesses by potentially lowering the cost of these goods. The Customs Act allows the Chief Executive Officer of Customs to grant these concessions if specific criteria are met, ensuring that the concessions do not undermine domestic production. The Explanatory Statement for Tariff Concession Instrument No. 0720053, which was made on 8 February 2008, outlines the process and criteria for granting such concessions, specifically for certain ceramic cookers in this instance, and confirms that the implementation of this TCO does not adversely affect any existing rights or impose new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0720053, under the Customs Act 1901, applies specifically to the application for tariff concessions on certain ceramic cookers submitted by Kamado Cookers Australia on 21 November 2007. The Act allows for the Chief Executive Officer of Customs to issue Tariff Concession Orders that lower the rate of customs duty on specified goods if certain criteria are met. In this instance, the CEO was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in section 269C of the Act. The instrument declares that the ceramic cookers in question are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a rate of duty of free, as opposed to the general rate of 5%. The TCO applies to the Commonwealth and any relevant importers, providing them with a benefit in terms of reduced duty on the specified goods. The instrument came into force on the date the application was lodged, 21 November 2007, and does not affect the rights of any person in a way that would disadvantage them or impose liabilities for actions taken prior to the date of registration.
Key Provisions
The Customs Act 1901 (the Act) contains provisions that allow the Chief Executive Officer of Customs (the CEO) to issue Tariff Concession Orders (TCOs) under section 269F. These orders apply a lower rate of customs duty to certain goods. In this instance, TCO No. 0720053, made on 8 February 2008, applies to certain ceramic cookers and specifies that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995 (the Tariff), with a duty rate of free, as opposed to the general rate of 5% (sections 269C, 269P(3), 269S(1)).
Entities and individuals must ensure they understand the criteria for applying for a TCO, as set out in section 269C. An application must be made to the CEO, and the CEO will assess whether the application meets the core criteria. This includes determining if there are no substitutable goods produced in Australia, as defined by sections 269D and 269E, at the time the application was lodged. If the CEO is satisfied that the application meets these criteria, they are required to issue a TCO (subsection 269P(3)).
Failure to comply with the provisions of the Act regarding TCOs could lead to civil or criminal consequences. The Act does not specify penalties for non-compliance with TCO requirements, but general provisions under the Customs Act may apply, which could include fines and imprisonment for breaches of customs regulations.
The TCO does not affect the rights of any person, except the Commonwealth, as at the date of registration, and it does not impose any liabilities on any person. Importers of goods subject to a TCO may apply for a refund of duty on goods imported since the date the TCO came into force, under paragraph 126(1)(r) of the Regulations (subsection 269S(1)).