EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0807798
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.
Moffat Pty Limited applied for a TCO in respect of certain boiling pans on 13 May 2008.
Instrument
TCO No 0807798 was made on 01 August 2008. It declares that those certain boiling pans 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. 0807798 is taken to have come into force on 13 May 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. 0807798, enacted under the Customs Act 1901, was introduced to address the issue of facilitating the import of certain goods by granting tariff concessions. The instrument was made by the Chief Executive Officer of Customs (CEO) following an application by Moffat Pty Limited for a Tariff Concession Order (TCO) concerning certain boiling pans. The purpose of this TCO, which came into effect on 13 May 2008, is to allow these specific boiling pans to be imported duty-free, which contrasts with the general rate of duty of 5% applicable to such goods. The CEO's decision to grant the concession was based on the absence of substitutable goods produced in Australia at the time the application was made. The enactment of this instrument ensures that the rights of importers are positively affected, allowing them to apply for refunds of duties paid on imports since the TCO's effective date, without imposing any liabilities on non-Commonwealth entities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that provide a lower rate of customs duty on certain goods. The Act applies to any person or entity that applies for a TCO on goods that are not specified in section 269SJ, which lists goods ineligible for such concessions. The application process requires the CEO to assess whether the core criteria are met, particularly whether no substitutable goods are produced in Australia in the ordinary course of business. This determination affects the rate of customs duty applicable to the goods in question, potentially providing significant tariff relief. The geographic reach of this legislation is national, as it is governed under the Commonwealth. While the Act broadly applies to any qualifying goods, it excludes certain items as specified. The application of the Act can be extended or restricted through subordinate instruments, although in this case, the primary focus is on the substantive criteria for TCO applications.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0807798 under the Customs Act 1901 (section 269F) require the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) if certain conditions are met. Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. A TCO application is considered valid if it is not in respect of goods specified in section 269SJ, which lists goods that cannot be subject to a TCO. Once the CEO is satisfied that the application meets the core criteria, a written order (section 269P(3)) is made, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby attracting a lower rate of customs duty.
Under this instrument, Moffat Pty Limited applied for a TCO concerning certain boiling pans on 13 May 2008. The CEO was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria. Consequently, TCO No. 0807798 was issued on 1 August 2008, declaring that these boiling pans are subject to item 50 of Schedule 4 to the Tariff, which results in a duty rate of free, down from the general rate of 5%. This means that importers of these specific boiling pans will no longer incur customs duty, provided they comply with the terms of the TCO.
The Act imposes several obligations and requirements on the parties involved. Firstly, any person seeking a TCO must submit an application to the CEO, ensuring that it complies with the provisions of the Customs Act 1901 (section 269F). The CEO must then determine whether the application meets the core criteria as outlined in section 269C, specifically considering whether any substitutable goods were produced in Australia. If the application is valid and meets the criteria, the CEO is required to make a written TCO (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)).
The Customs Act 1901 imposes penalties and consequences for any breaches of the TCO provisions. However, the explanatory statement does not detail specific offences or penalties. Generally, failure to comply with the terms of a TCO could lead to various civil or criminal consequences, including fines or imprisonment, depending on the severity of the breach. The maximum penalties would be determined in accordance with the relevant sections of the Customs Act 1901 and associated regulations. The Act ensures that the TCO does not affect the rights of any person as at the date of registration, so as not to disadvantage them or impose liabilities for actions taken before the registration date.