EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802231
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 (in cluding 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 bathroom and or toilet articles on 12 February 2008.
Instrument
TCO No 0802231 was made on 18 April 2008. It declares that those certain bathroom and or toilet articles 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. 0802231 is taken to have come into force on 12 February 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 Customs Act 1901 was enacted by the Commonwealth Parliament to regulate the importation of goods into Australia, including the imposition of customs duties. The Act established a framework under which Tariff Concession Orders (TCOs) can be made to provide tariff concessions for certain goods. The explanatory statement for Tariff Concession Instrument No. 0802231, enacted in 2008, indicates that the instrument was introduced to address the need for tariff concessions for specific goods, in this case, certain bathroom and toilet articles. The instrument was made after Caroma Industries Ltd applied for a TCO, and the Chief Executive Officer of Customs was satisfied that the application met the core criteria, specifically that no substitutable goods were produced in Australia. The policy objective of this instrument, as with other TCOs, is to provide tariff relief for goods where appropriate, facilitating trade and potentially benefiting importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force.
Scope and Application
The Tariff Concession Instrument No. 0802231, issued under the Customs Act 1901, applies specifically to the reduction of customs duty on certain bathroom and toilet articles, as applied by Caroma Industries Ltd. The Act facilitates the application process for tariff concessions, allowing businesses to apply for a Tariff Concession Order (TCO) if certain criteria are met, notably that no substitutable goods are produced in Australia. This concession is subject to the approval of the Chief Executive Officer of Customs, who must ensure that the application does not pertain to goods explicitly excluded by section 269SJ of the Act. The geographic reach of this legislation is national, applying across Australia under Commonwealth law. There are no stated exclusions within this particular TCO, though the application process involves public consultation as stipulated by section 269K(1) of the Act. The instrument came into effect on the date the application was lodged, 12 February 2008, and does not retroactively affect any rights or impose new liabilities on entities other than the Commonwealth.
Key Provisions
The main sections of the Customs Act 1901 that are relevant to Tariff Concession Orders (TCOs) include sections 269C, 269B, 269D, 269E, and 269P. These sections outline the criteria for TCO applications, the definitions of key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods," and the process for the Chief Executive Officer of Customs (CEO) to assess and make a TCO. Specifically, section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring the goods to which the concession applies, as specified in section 269P(3).
The obligations imposed by the Act on the parties it governs include the requirement for the CEO to assess the validity of TCO applications and ensure that they meet the specified criteria. The CEO must also publish a notice in the Gazette, inviting any interested parties to submit their views on the application, as outlined in subsection 269K(1). Additionally, Caroma Industries Ltd, as the applicant for the TCO, must provide all necessary information and evidence to substantiate their claim that no substitutable goods were produced in Australia. The CEO must ensure that these obligations are met before making a TCO.
In terms of offences, penalties, or consequences for breach, the Act does not specify any criminal penalties for non-compliance with the TCO provisions. However, any party found to have provided false information or misleading statements in their TCO application could potentially face civil consequences, such as having to repay any duties that were improperly claimed. The maximum penalties for such civil breaches are not specified in the Act but would typically depend on the nature and extent of the misrepresentation. The Act ensures that the TCO does not disadvantage any person by imposing liabilities in respect of actions taken before the TCO came into effect, thus safeguarding the rights of importers and other stakeholders.