EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803408
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.
Viniquip Pty Ltd applied for a TCO in respect of certain washing machine drying capping and labelling machine on 29 February 2008.
Instrument
TCO No 0803408 was made on 16 May 2008. It declares that those certain washing machine drying capping and labelling 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. 0803408 is taken to have come into force on 29 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. 0803408 was enacted under the Customs Act 1901 with the objective of facilitating tariff concessions on specific imported goods. This legislation addresses the gap by providing a streamlined process for businesses to apply for a Tariff Concession Order (TCO) when they are importing goods that are not produced in Australia and for which no substitutable goods are available domestically. The instrument was introduced to ensure that Australian businesses can access imported goods at a lower customs duty rate, which can be crucial for their competitiveness and operational efficiency. The instrument was enacted by the Chief Executive Officer of Customs, who is mandated under section 269F of the Act to assess and approve applications for TCOs if they meet the specified criteria.
In this particular case, Viniquip Pty Ltd successfully applied for a TCO on certain washing machine drying capping and labelling machines, leading to Instrument TCO No. 0803408. The instrument declares that these specific machines are subject to a zero percent duty rate, down from the general rate of 5%. The instrument was published in the Gazette with an invitation for public submissions, none of which were received. The TCO came into effect on the date of application, 29 February 2008, and it ensures that the rights of importers are positively affected, including the potential for duty refunds on imports since the effective date of the TCO.
Scope and Application
The Customs Act 1901, through its Part XVA, provides the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to persons or entities seeking a reduction in customs duty on specific goods, which must meet the core criteria set out in the legislation. Specifically, a TCO can only be applied for goods that are not specified in section 269SJ of the Act and where no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. The application process requires the CEO to consider submissions from any interested parties and, if satisfied, to issue a TCO specifying the lower duty rate for the specified goods. This instrument has a Commonwealth reach, applying nationally across Australia. The TCOs do not affect pre-existing rights or liabilities of any person other than the Commonwealth, ensuring that the concession does not disadvantage anyone or impose new liabilities. Viniquip Pty Ltd’s application for a TCO on certain washing machine drying capping and labelling machines, which was approved and came into effect on 29 February 2008, is a practical example of this process in action.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269B, 269D, 269E, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO determines that the application meets the core criteria set out in section 269C, which includes ensuring that no substitutable goods were produced in Australia in the ordinary course of business, a TCO is made under section 269P. The TCO declares that the goods are subject to a lower rate of customs duty specified in the Customs Tariff Act 1995 (the Tariff).
The Act imposes several obligations on the parties involved. The CEO must ensure that any application for a TCO does not pertain to goods specified in section 269SJ, which includes goods that are prohibited or restricted. The CEO must also verify that the application meets the core criteria by confirming that no substitutable goods were produced in Australia. Upon satisfying these conditions, the CEO must make a written TCO order. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any person who might oppose the TCO.
Breaches of the provisions under the Customs Act 1901 can lead to various civil and criminal consequences. For example, if an entity falsely claims that no substitutable goods were produced in Australia to secure a TCO, they may face penalties for providing misleading information. The Act does not specify maximum penalties for these offences, but general penalties for misleading or deceptive conduct under the Australian Consumer Law may apply. Additionally, any attempt to import goods under a TCO without proper authorisation or compliance with the Act could result in fines or imprisonment, depending on the severity of the breach.
Overall, the Tariff Concession Instrument No. 0803408 establishes a framework under which certain washing machine drying capping and labelling machines receive a zero duty rate, provided that the CEO determines the application meets the core criteria and no substitutable goods are produced in Australia. This mechanism ensures that importers can benefit from reduced customs duty rates while maintaining compliance with the Act's obligations and avoiding potential penalties for non-compliance.