EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0808038
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.
KDB Engineering Pty Ltd applied for a TCO in respect of certain soiled linen trolleys on 14 May 2008.
Instrument
TCO No 0808038 was made on 04 August 2008. It declares that those certain soiled linen trolleys 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. 0808038 is taken to have come into force on 14 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs and excise, including a scheme for Tariff Concession Orders (TCOs). The Tariff Concession Instrument No. 0808038 was introduced to address a specific gap in the legislation by allowing for the concession of customs duty on certain goods that are not produced in Australia and for which no suitable substitutes are available domestically. This instrument was created in response to an application by KDB Engineering Pty Ltd for tariff concessions on certain soiled linen trolleys, which were granted as no substitutable goods were produced in Australia. The purpose of this concession is to encourage the importation of these goods by reducing the customs duty from the general rate of 5% to free, thereby benefiting importers by potentially allowing them to claim refunds for duties paid on imports before the concession was effective. The instrument was made on 4 August 2008 and is taken to have come into force on the date the application was lodged, 14 May 2008.
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, enabling a lower rate of customs duty on certain goods. This Act applies to any person or entity that seeks to import goods eligible for a TCO, provided the goods are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The application process mandates that the CEO assesses whether the applicant's goods meet the core criteria, namely that no substitutable goods are produced in Australia in the ordinary course of business. Once a TCO is granted, it applies to the specific goods from the date the application was lodged, offering tariff relief from that point forward. Exemptions or exclusions apply as per section 269SJ, and the CEO is obligated to publish notices in the Gazette to invite submissions from interested parties, although in the case of TCO No 0808038, no submissions were received. This legislative framework, therefore, extends its jurisdiction across Australia, impacting the importation duties on specified goods as outlined in the Customs Tariff Act 1995.
Key Provisions
The Tariff Concession Instrument No. 0808038 under the Customs Act 1901 primarily addresses the application and issuance of Tariff Concession Orders (TCOs). When a person applies for a TCO in respect of goods under section 269F (1), the Chief Executive Officer of Customs (CEO) must assess whether the application meets the core criteria stipulated in section 269C. If the CEO determines that the application is valid and no substitutable goods are produced in Australia in the ordinary course of business, a written TCO is issued. This is done to ensure that the goods specified in the TCO application are subject to a reduced rate of customs duty.
Under section 269P(3) of the Act, if the CEO is satisfied that the application meets the core criteria, a TCO is issued. The TCO specifies the particular item in Schedule 4 of the Customs Tariff Act 1995 that applies to the goods in question. For instance, in this case, the TCO No. 0808038 applies item 50 of Schedule 4, which pertains to certain soiled linen trolleys, reducing the duty from 5% to free.
The obligations imposed on the parties by this Act include the requirement for the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any person who may have objections to lodge a submission. This is in accordance with subsection 269K(1). Additionally, the Act mandates that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, ensuring that no one is disadvantaged or imposed with new liabilities for actions taken before the registration date. Importers, however, will benefit as they can apply for a refund of duty on goods imported since the day the TCO came into force, as per paragraph 126(1)(r) of the Regulations.
Breaches of the provisions of this Act can lead to various civil or criminal consequences. The exact nature and severity of these consequences depend on the specific section breached and the circumstances surrounding the breach. However, the Act does not specify maximum penalties for these breaches, indicating that the penalties could vary significantly based on the nature and severity of the infraction. It is imperative for parties governed by this Act to comply with its provisions to avoid any potential legal repercussions.