EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803931
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.
IMI Cornelius Australia Pty Limited applied for a TCO in respect of certain water carbonators on 12 March 2008.
Instrument
TCO No 0803931 was made on 30 May 2008. It declares that those certain water carbonators 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. 0803931 is taken to have come into force on 12 March 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, enacted by the Parliament of Australia, addresses the regulation of customs duties and provides a framework for granting tariff concessions. The legislation aims to ensure that Australian industries remain competitive by reducing customs duties on certain goods, thereby promoting economic growth and supporting domestic industries that may lack sufficient competition from locally produced substitutes. The Act empowers the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that reduce the rate of customs duty on specific goods. The explanatory statement for Tariff Concession Instrument No. 0803931, issued on 30 May 2008, pertains to an application by IMI Cornelius Australia Pty Limited for a TCO on certain water carbonators. The instrument was made effective from 12 March 2008, reducing the general duty rate of 5% to free duty, as no substitutable goods were being produced in Australia. This action aligns with the policy objective of providing tariff relief to encourage the importation of goods where local production does not sufficiently meet demand.
Scope and Application
The Customs Act 1901, as amended, provides the legal framework for the administration of customs duties in Australia. Specifically, Part XVA of the Act enables the Chief Executive Officer (CEO) of Customs to make Tariff Concession Orders (TCOs) that lower the rate of customs duty on specified goods. The application for a TCO must not relate to goods listed in section 269SJ, which are ineligible for tariff concessions. The CEO determines the eligibility of an application by assessing whether the goods subject to the TCO are not produced in Australia in the ordinary course of business, and if there are no substitutable goods available domestically, as defined by sections 269C, 269D, and 269E of the Act. If these criteria are met, a TCO is issued under section 269P, specifying the applicable tariff item from Schedule 4 of the Customs Tariff Act 1995. The TCO applies nationally and does not retroactively affect the rights of any person other than the Commonwealth, meaning that it only benefits importers who apply for duty refunds on eligible goods imported since the effective date of the order. Any interested party may challenge the issuance of a TCO by lodging a submission with the CEO following the publication of the application in the Gazette.
Key Provisions
The Tariff Concession Instrument No. 0803931, made under the Customs Act 1901, is a legislative instrument that applies to certain water carbonators. As per section 269P(3) (subsection 269P(3)), if the Chief Executive Officer (CEO) of Customs is satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria, the CEO must make a written order declaring that the specified goods are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. In this instance, the CEO was satisfied that the application met the core criteria, which include the absence of substitutable goods produced in Australia on the day the application was lodged (section 269C).
The obligations under the Act for the parties involved are primarily centred on the application process and the determination of eligibility for tariff concessions. The applicant, in this case, IMI Cornelius Australia Pty Limited, must ensure their application is valid and meets the criteria set out in the Act, particularly the absence of substitutable goods produced in Australia (section 269C). The CEO must review the application, determine if it meets the core criteria, and, if satisfied, make a written TCO (section 269P(3)). The CEO also has a responsibility to publish a notice in the Gazette inviting submissions from interested parties if they consider there are reasons why the TCO should not be made (subsection 269K(1)).
Failure to comply with the requirements of the Customs Act 1901 may result in various consequences. Firstly, if an entity or individual fails to adhere to the conditions set out in the TCO, they may face civil or criminal penalties. For example, if goods are imported without the appropriate tariff concessions, the importer may be liable for the full duty on those goods. The maximum penalties for breaches of the Customs Act can include fines and imprisonment, depending on the severity of the breach and whether it is considered a civil or criminal matter. It is important to note that 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 (subsection 269S(1)). The rights of importers will be beneficially affected as they 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 (paragraph 126(1)(r) of the Regulations).