EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804285
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.
Hagemeyer Brands Australita Pty Ltd applied for a TCO in respect of certain domestic cooktops on 15 April 2008.
Instrument
TCO No 0804285 was made on 11 July 2008. It declares that those certain domestic cooktops 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. 0804285 is taken to have come into force on 15 April 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. 0804285, enacted in 2008 under the Customs Act 1901, addresses the need for tariff concessions on specific imported goods where there are no substitutable goods produced in Australia. This legislation was introduced to provide relief to businesses that rely on importing certain goods by reducing or eliminating customs duties on those goods. The instrument was enacted by the Chief Executive Officer of Customs, acting on an application from Hagemeyer Brands Australita Pty Ltd for tariff concessions on certain domestic cooktops. The instrument provides a free rate of duty for these cooktops, which contrasts with the general rate of 5%, aiming to benefit importers by potentially allowing them to claim duty refunds for goods imported since the effective date of the tariff concession. This measure ensures that no existing rights or liabilities of persons, apart from the Commonwealth, are adversely affected by the concession.
Scope and Application
The Tariff Concession Instrument No. 0804285, made under the Customs Act 1901, applies to the concession of customs duty on certain domestic cooktops imported by Hagemeyer Brands Australita Pty Ltd. The instrument specifically targets goods that are subject to a Tariff Concession Order (TCO) issued by the Chief Executive Officer of Customs (CEO) when it is determined that no substitutable goods are produced in Australia in the ordinary course of business. This Act is applicable to any person or entity importing the specified goods, effectively lowering the customs duty rate from the general 5% to free, provided the application meets the criteria outlined in the Act. The geographic reach of this legislation is national, as it operates within the framework of the Commonwealth of Australia. There are exclusions in place for certain goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The application process involves a submission to the CEO, followed by a potential public notice and opportunity for submissions, although in this instance, no submissions were received. The TCO is effective from the date the application was lodged, 15 April 2008, and does not affect any existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of the Customs Act 1901, particularly relevant to Tariff Concession Orders (TCOs), include sections 269C (core criteria for TCOs), 269F (application for TCO), 269P (making of TCOs), and 269S (commencement of TCOs). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO on goods, provided the goods are not specified in section 269SJ. If the CEO determines that the application meets the core criteria in section 269C, such as the absence of substitutable goods produced in Australia, the CEO must issue a TCO. Section 269P(3) mandates that the CEO make a written order declaring the goods subject to a prescribed tariff item, resulting in a lower rate of customs duty.
The Customs Act imposes several obligations on the parties involved. The CEO is required to assess the validity of TCO applications under section 269F and must ensure that the application meets the core criteria as outlined in section 269C. This includes verifying that no substitutable goods are produced in Australia on the date the application was lodged. Upon meeting these criteria, the CEO must publish a notice in the Gazette inviting submissions from any interested parties, as per section 269K(1). Additionally, section 269S stipulates that a TCO is effective from the date the application is lodged, which means that importers can apply for duty refunds on goods imported since the effective date.
In terms of penalties and consequences, the Customs Act does not explicitly outline specific offences or penalties related to the breach of TCO provisions. However, the general framework of the Customs Act includes provisions for enforcement and compliance, which can include fines and penalties for non-compliance with customs regulations. Although the explanatory statement does not detail specific penalties for TCOs, the broader context of the Customs Act suggests that any breach of its provisions could result in civil or criminal consequences, including fines and imprisonment, depending on the severity of the breach. The absence of specific penalties in this context does not exempt the parties from general compliance requirements and the potential for enforcement actions under the broader customs legislation.