EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721697
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.
Caroma Industries Ltd applied for a TCO in respect of certain plastic bathroom fittings on 17 December 2007.
Instrument
TCO No 0721697 was made on 07 March 2008. It declares that those certain plastic bathroom fittings 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. 0721697 is taken to have come into force on 17 December 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 Commonwealth Parliament, establishes a framework for the administration of customs and excise duties in Australia. It provides the authority for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) under Part XVA of the Act, which can lower the customs duty rate on specific goods. This mechanism was introduced to address the need for targeted tariff reductions that could benefit industries by making imported goods more competitively priced without broadly affecting the revenue from customs duties. The objective of these concessions is to facilitate trade and support industries by reducing the cost of imported goods, as exemplified by Tariff Concession Order No. 0721697 which was made in response to an application by Caroma Industries Ltd for certain plastic bathroom fittings. This TCO, effective from 17 December 2007, grants a duty-free status on these fittings, aligning with the policy objective of fostering economic growth by lowering the tariff barrier for specific imported goods.
Scope and Application
The Tariff Concession Instrument No. 0721697 applies to Caroma Industries Ltd and its specific plastic bathroom fittings, which are subject to a lower rate of customs duty under the Customs Act 1901. The Act governs the process of granting tariff concession orders (TCOs) for goods, whereby a reduced customs duty rate is applied to certain goods if the Chief Executive Officer of Customs (CEO) determines that the goods do not have substitutable products manufactured domestically. The CEO's decision hinges on the absence of substitutable goods produced in Australia in the ordinary course of business on the day the application was lodged. The geographic reach of this legislation is national, as it applies across Australia under the Commonwealth Customs Act 1901. The exclusions are limited to goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The instrument may extend or restrict its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the prescribed duty rates in the Tariff.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0721697 (F2008L00941) focus on the process and criteria for making a Tariff Concession Order (TCO) under the Customs Act 1901. Section 269F of the Act allows an application for a TCO in respect of goods, provided they are not specified in section 269SJ. The CEO of Customs must assess whether the application meets the core criteria, primarily if no substitutable goods were produced in Australia on the day the application was lodged, as outlined in section 269C. If the CEO is satisfied with the application, they are required to make a written order (a TCO) under section 269P(3). This instrument specifically addresses Caroma Industries Ltd's application for certain plastic bathroom fittings, declaring that these goods are subject to a lower rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, with the rate of duty for these goods being free, down from the general rate of 5%.
The Act imposes certain obligations on the parties involved. The CEO of Customs must ensure that the application for a TCO is assessed against the criteria in section 269C and that any substitutable goods have been duly considered. If the application meets the criteria, the CEO must proceed to issue a written TCO order. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette, inviting submissions from any interested parties on whether the TCO should be made. This transparency requirement ensures that the process is open and any potential objections can be addressed before the TCO is issued.
Failure to comply with the provisions of the Customs Act 1901 or the Tariff Concession Instrument could result in legal consequences. While the explanatory statement does not explicitly detail the specific offences or penalties, under the general framework of the Customs Act, breaches could lead to civil or criminal penalties. These could include fines and, in severe cases, imprisonment, depending on the nature and severity of the breach. The exact penalties would be determined by the relevant sections of the Customs Act and any other applicable laws.