EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721822
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.
Edoma Australia Limited applied for a TCO in respect of certain floor sweepers on 18 December 2007.
Instrument
TCO No 0721822 was made on 07 March 2008. It declares that those certain floor sweepers 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. 0721822 is taken to have come into force on 18 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 Tariff Concession Instrument No. 0721822 was enacted in 2008 under the Customs Act 1901 to address the need for tariff concessions on specific goods. This instrument was introduced to facilitate the application process for Tariff Concession Orders (TCOs), which allow for a lower rate of customs duty on specified goods. The Customs Act 1901, through its Part XVA, provides a framework for the CEO of Customs to make TCOs where certain criteria are met, such as the absence of substitutable goods produced in Australia. The policy objective is to support Australian businesses by potentially lowering the cost of imported goods through tariff concessions, thereby making them more competitive. The CEO is required to consult with stakeholders, as evidenced by the publication of an invitation for submissions, although no submissions were received for this particular TCO. The TCO does not disadvantage any person by imposing new liabilities and instead aims to provide a benefit to importers by potentially allowing them to claim refunds on duties paid prior to the TCO's effective date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCO) that apply a lower rate of customs duty to specified goods. This legislation applies to any person or entity seeking to import goods that qualify for such tariff concessions. The scope of this Act extends to all industries that involve the importation of goods subject to a TCO, particularly those where the imported goods are deemed not to have substitutable products produced in Australia. The Act operates on a Commonwealth level, with its jurisdiction across Australia. Any exclusions or exemptions are determined by the criteria outlined in section 269SJ, which specifies goods ineligible for TCOs, and by the conditions set out in sections 269C, 269D, and 269E concerning the production and substitution of goods within Australia. The application and interpretation of the Act can be further refined through subordinate instruments, although the primary legislation itself sets the foundational criteria and conditions for TCOs.
Key Provisions
The main operative sections of the Customs Act 1901, as implemented in Tariff Concession Instrument No. 0721822, pertain to the establishment and application of Tariff Concession Orders (TCOs) for certain goods. Under section 269F, an application for a TCO can be made to the Chief Executive Officer of Customs (CEO). If the application meets the core criteria specified in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged, the CEO must make a written order (section 269P(3)). This order specifies that the goods in question are subject to a lower rate of customs duty, as outlined in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by this Act on the parties involved are primarily focused on the application process for TCOs. The CEO must ensure that the application is valid and meets the specified criteria. If the application is deemed valid, the CEO must issue a TCO within the stipulated timeframe. Furthermore, as per section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit any reasons why the TCO should not be granted. In this instance, no submissions were received, leading to the issuance of TCO No. 0721822.
In terms of consequences for breach, the Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for failing to comply with the provisions of a TCO. However, general contraventions of the Customs Act can lead to significant penalties. For instance, under section 232 of the Customs Act, the penalties for fraudulent importation can include fines of up to $22,000 or imprisonment for up to five years, or both. Additionally, the Act provides for civil penalties for breaches, which can include substantial fines, further underscoring the importance of compliance with customs regulations.
TCO No. 0721822 ensures that the floor sweepers in question benefit from a lower rate of duty, thereby providing economic relief to importers and potentially stimulating market activity. The instrument also ensures that no existing rights or liabilities are adversely affected, maintaining legal certainty for all parties involved.