EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802532
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.
CSR Building Products Limited applied for a TCO in respect of certain cornice plant dryers on 13 February 2008.
Instrument
TCO No 0802532 was made on 18 April 2008. It declares that those certain cornice plant dryers 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. 0802532 is taken to have come into force on 13 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 Tariff Concession Instrument No. 0802532, enacted in 2008, operates under the Customs Act 1901 to facilitate tariff concessions for specific goods, thereby addressing the need to lower customs duties for certain imported items that do not have Australian-made substitutes. This instrument was introduced to promote fair competition and economic efficiency by reducing the tariff rates on specific goods, as long as no substitutable goods are produced domestically. The instrument was created and is administered by the Chief Executive Officer of Customs, who must ensure the application for a tariff concession order meets the criteria set out in the Act. The overarching policy objective is to encourage the import of goods that are not produced locally, thus benefiting consumers and potentially stimulating economic activity through reduced costs and increased availability of certain products.
This instrument was introduced following an application by CSR Building Products Limited for a tariff concession on certain cornice plant dryers, which are now subject to a zero per cent duty rate, down from the general rate of five per cent. The application was assessed, and no objections were raised during the consultation period, leading to the issuance of the tariff concession. The tariff concession order came into force on the date the application was lodged, ensuring that importers of the specified goods can apply for duty refunds from that date. This legislative measure ensures that the rights of importers are positively affected, without imposing any liabilities on other stakeholders.
Scope and Application
The Customs Act 1901 applies to the process of granting Tariff Concession Orders (TCOs) for specific goods, allowing for reduced customs duties under certain conditions. This Act applies to persons or entities seeking to import goods and provides a mechanism through which they can apply for tariff concessions if the goods in question are not produced in Australia and have no substitutable goods available domestically. The Act's scope encompasses the review and decision-making process undertaken by the Chief Executive Officer of Customs, who must consider whether the application meets the specified core criteria. The application process includes a requirement for public notice and consultation, although in this instance, no submissions were received. The TCO's application is national in scope, and it does not affect any pre-existing rights or impose any liabilities on individuals or entities except for potentially beneficial impacts on importers who may apply for duty refunds on goods imported since the effective date of the concession.
Key Provisions
The main provisions of Tariff Concession Instrument No. 0802532 are outlined in the Customs Act 1901 (sections 269C, 269F, 269K(1), 269P(3), and 269S(1)). These sections establish the framework for Tariff Concession Orders (TCOs) that reduce or eliminate customs duty on certain goods. Specifically, section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO, while section 269C specifies the core criteria that the application must meet. If the CEO is satisfied that the application meets these criteria, they are required under section 269P(3) to issue a written TCO. Additionally, section 269K(1) mandates that the CEO publish a notice in the Gazette inviting submissions on the TCO application, although no submissions were received for this particular TCO.
The Act imposes several obligations on the parties involved. The CEO must carefully assess each TCO application to ensure it meets the core criteria, as defined by sections 269C and 269D of the Act. The CEO must also publish a notice in the Gazette as soon as practicable after accepting an application as valid, inviting any interested parties to submit their views on whether the TCO should be made (section 269K(1)). Furthermore, the CEO is required to make the TCO if the application meets the specified criteria (section 269P(3)). In this case, the CEO was satisfied that the application by CSR Building Products Limited for certain cornice plant dryers met the criteria and thus issued TCO No. 0802532.
Breaching the requirements of the Customs Act 1901 or the provisions of a TCO can lead to various legal consequences. Under section 166 of the Customs Act 1901, any person who contravenes the Act or the regulations may be liable to a penalty. For example, section 170 imposes a civil penalty of up to $22,200 for contravening provisions related to customs duty. If an offence is committed knowingly and recklessly, the maximum penalty can be significantly higher, reaching up to $222,000 under section 170A for corporations and $44,400 for individuals. Additionally, any person who knowingly makes a false or misleading statement in an application for a TCO could face criminal charges under section 275 of the Act, with penalties including fines and imprisonment.