EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804815
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.
Dixon Asia Pacific applied for a TCO in respect of certain camlock fittings on 22 April 2008.
Instrument
TCO No 0804815 was made on 18 July 2008. It declares that those certain camlock fittings
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. 0804815 is taken to have come into force on 22 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the regulation of customs duties and other import-related activities. One of the mechanisms within this Act is the Tariff Concession Order (TCO) system, which allows for reduced customs duty rates on certain imported goods under specific conditions. The problem or gap this legislation addresses is the need to provide tariff relief for goods that are not produced in Australia and for which no substitutable goods are available domestically. Instrument No. 0804815, made under the Customs Act, was introduced to provide tariff concessions for certain camlock fittings, allowing these goods to be imported duty-free. The policy objective, as stated, is to facilitate trade and economic benefits by ensuring that importers are not unduly burdened by customs duties on goods that cannot be produced locally.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which apply a lower rate of customs duty on certain goods. The application for a TCO must meet core criteria, including the absence of substitutable goods produced in Australia in the ordinary course of business. The CEO's decision to issue a TCO is contingent upon satisfying these criteria and the absence of any objections following a published notice in the Gazette. TCO No. 0804815, issued on 18 July 2008, applies to certain camlock fittings, reducing their duty rate to free from the general rate of 5%. The instrument applies nationally and affects the rights of importers, allowing them to apply for duty refunds on imports of these goods since the effective date of the TCO, 22 April 2008, without imposing any new liabilities.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0804815 (section 269C and section 269P) require the Chief Executive Officer (CEO) of Customs to consider an application for a Tariff Concession Order (TCO) under the Customs Act 1901. If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the specified goods are subject to the concession. This instrument specifically applies to certain camlock fittings, where the normal customs duty rate of 5% is reduced to zero under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes obligations on the CEO, who must assess whether an application for a TCO meets the core criteria outlined in section 269C. These criteria include ensuring that no substitutable goods are produced in Australia. Section 269P(3) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties if a TCO application is accepted as valid. In this instance, no submissions were received. Furthermore, section 269S(1) mandates that a TCO comes into force on the day the application was lodged, which for TCO No. 0804815 was 22 April 2008.
Breaches of the obligations under the Customs Act 1901 can lead to various consequences. Section 286 of the Act specifies that any person who contravenes the Act or Regulations is liable to a penalty. For serious breaches, the maximum penalty is 10,000 penalty units or imprisonment for five years, or both, under section 287. Civil penalties, as outlined in section 288, can also be imposed for breaches of the Act or Regulations, with the specifics of these penalties depending on the nature and severity of the offence. Additionally, section 289 provides for the recovery of duty and penalties through the courts, ensuring compliance with the legislative requirements.