EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0800551
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.
Sunbeam Corporation Ltd applied for a TCO in respect of certain water purifiers and/or filters on 10 January 2008.
Instrument
TCO No 0800551 was made on 25 March 2008. It declares that those certain water purifiers and/or filters 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. 0800551 is taken to have come into force on 10 January 2008.
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. 0800551, enacted under the Customs Act 1901, aims to provide tariff concessions on specific goods to foster economic benefits and encourage fair trade practices. The Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the imposition of customs duties and the granting of tariff concessions, with the intent to regulate and facilitate international trade. This particular instrument addresses the need for tariff relief on certain water purifiers and/or filters, responding to an application by Sunbeam Corporation Ltd. The instrument was made to alleviate the financial burden on importers and to support the availability of competitively priced goods in the Australian market. The Tariff Concession Order was issued by the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia at the time of the application, thus meeting the core criteria as outlined in the Act. The order effectively reduces the duty rate on these goods from the general rate of 5% to free, effective from the date the application was lodged, 10 January 2008.
Scope and Application
The Tariff Concession Instrument No. 0800551 under the Customs Act 1901 applies to the specific water purifiers and/or filters for which Sunbeam Corporation Ltd applied for a Tariff Concession Order (TCO) on 10 January 2008. This legislation facilitates the application of a lower rate of customs duty to certain goods, provided they meet specific criteria under the Act. The TCO applies to the entities involved in the importation of these goods, specifically benefiting importers by potentially reducing their duty obligations. The application and subsequent TCO are made under the authority of the Chief Executive Officer of Customs, who ensures that the goods in question do not have substitutable Australian-produced alternatives and thus qualify for the tariff concession. The geographic scope of this legislation is national, as it pertains to customs duties across Australia. The TCO does not disadvantage any existing rights of non-Commonwealth persons and does not impose new liabilities on anyone. The legislation also allows for the extension or restriction of its application through subordinate instruments, ensuring flexibility in its implementation.
Key Provisions
The primary operative sections of this legislation, particularly under section 269F of the Customs Act 1901, allow for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. This mechanism facilitates the granting of lower rates of customs duty for specified goods, contingent upon certain conditions being met. Section 269C outlines the core criteria that must be satisfied for a TCO application to be approved. This includes ensuring that on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. Definitions for key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269B respectively.
The obligations imposed by this Act on the parties involved primarily revolve around the application process and the conditions set forth in section 269C. The CEO must rigorously assess each TCO application to ensure compliance with the specified criteria, particularly focusing on the absence of substitutable goods produced in Australia. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from interested parties who may oppose the making of a TCO. This transparency measure ensures that all relevant stakeholders have an opportunity to voice their concerns. In this particular case, the CEO did not receive any submissions opposing the TCO for water purifiers and/or filters.
The legislation also delineates the consequences for non-compliance. While the explanatory statement does not explicitly detail criminal or civil penalties for breaches, it does clarify that the TCO does not impose any liabilities on any person other than the Commonwealth. It also ensures that the rights of importers are beneficially affected, and they can apply for a refund of duty on goods imported since the TCO came into force. However, the lack of specific penalties suggests that the focus is more on procedural compliance and the fair administration of tariff concessions rather than punitive measures.