EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802706
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.
Major Electrical Appliances applied for a TCO in respect of certain washing machines on 15 February 2008.
Instrument
TCO No 0802706 was made on 28 April 2008. It declares that those certain washing machines 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. 0802706 is taken to have come into force on 15 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. 0802706, enacted in 2008, is an instrument under the Customs Act 1901, which facilitates the application of lower rates of customs duty to specified goods through Tariff Concession Orders (TCOs). The instrument was introduced to address the gap in the tariff structure for goods that are not produced in Australia and for which there are no substitutable goods produced domestically. This was achieved by allowing the Chief Executive Officer of Customs to make a TCO if the application meets the core criteria, specifically if no substitutable goods were produced in Australia on the day the application was lodged. The instrument was designed to ensure that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force. The policy objective is to provide relief on customs duties for imported goods that are essential and not produced locally, thereby supporting trade and potentially lowering consumer prices for such goods.
The instrument was enacted by the relevant authority under the Customs Act 1901, allowing the CEO to make a written order that applies a prescribed lower rate of customs duty to the specified goods. The process includes a requirement for the CEO to publish a notice in the Gazette inviting submissions on the TCO application, although in this case, no submissions were received. The TCO came into force on the date the application was lodged, ensuring that the rights of persons other than the Commonwealth are not adversely affected by the instrument.
Scope and Application
The Customs Act 1901, as amended, encompasses the process through which Tariff Concession Orders (TCOs) are established under the Tariff Concession Instrument No. 0802706. This Act applies to any person or entity seeking a tariff concession for specific goods, ensuring that the application aligns with the criteria set out in sections 269C, 269D, 269E, and 269F of the Act. The Act mandates that the CEO of Customs must evaluate whether the application meets the core criteria, which includes determining if substitutable goods are produced in Australia. If these criteria are met, a TCO is issued, thereby applying a reduced customs duty rate to the specified goods. The geographic scope of this legislation is national, as it pertains to all entities and persons within Australia. It is noteworthy that the application process and the subsequent concessions are subject to the exclusions stipulated in section 269SJ of the Act, which lists goods that are ineligible for tariff concessions. The TCO is subject to further specification and regulation through subordinate instruments, ensuring its application is precise and aligned with the overarching objectives of the Customs Act 1901.
Key Provisions
The main sections of this legislation pertain to the creation and implementation of Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows an individual to apply for a TCO in respect of goods, and section 269C stipulates that a TCO application meets the core criteria if, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that an application meets the core criteria, a written order must be made declaring that the goods the subject of the application are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
This legislation imposes certain obligations on the CEO of Customs. Upon receiving a TCO application, the CEO must first determine whether the application is valid and if the goods in question are not specified in section 269SJ of the Act. If the application is valid, the CEO must then decide whether it meets the core criteria as outlined in section 269C. If the CEO is satisfied that the application meets the criteria, a TCO must be issued, as per section 269P(3). Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties, as required by subsection 269K(1).
Failure to comply with the provisions of this legislation can result in civil or criminal consequences. Although the specific penalties for breaches are not detailed in the explanatory statement, breaches of the Customs Act 1901 generally carry significant penalties, including fines and imprisonment. The seriousness of the penalty often depends on the nature and extent of the breach, as well as any aggravating factors such as intent or previous convictions. The maximum penalties for breaches of the Customs Act 1901 can be found in the relevant sections of the Act itself, which may include fines of up to $22,000 and/or imprisonment for up to five years for serious or repeated breaches. However, it is important to note that the specific penalties applicable in any given case would need to be determined by the courts, taking into account all relevant circumstances.