EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0808303
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 Pty Ltd applied for a TCO in respect of certain hose fittings and/or couplings on 15 May 2008.
Instrument
TCO No 0808303 was made on 8 August 2008. It declares that those certain hose fittings and/or couplings 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. 0808303 is taken to have come into force on 15 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, includes provisions for Tariff Concession Orders (TCOs) which are designed to lower customs duty rates for specific goods. The Act allows the Chief Executive Officer of Customs to grant these concessions if certain criteria are met, such as the absence of substitutable goods produced in Australia. The problem or gap addressed by the Act is the facilitation of lower import duties for goods that are not domestically produced as substitutes, thereby encouraging trade and potentially reducing costs for businesses and consumers. The policy objective is to provide a mechanism for tariff concessions that benefit the economy by lowering the cost of importing certain goods. The Customs Act 1901 thereby aims to support trade by making imported goods more competitively priced when there are no domestic alternatives.
Scope and Application
The Tariff Concession Instrument No. 0808303 applies to the import of specific hose fittings and/or couplings, as declared under the Customs Act 1901. This legislation enables the Chief Executive Officer of Customs to grant tariff concession orders (TCOs) for goods not produced in Australia, thereby reducing the customs duty on these goods. The TCOs are applicable to entities and individuals involved in the importation of these specified goods, offering them a reduced duty rate as outlined in the Customs Tariff Act 1995. The geographic reach of this legislation is national, as it is an instrument of the Commonwealth and applies across Australia. The TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on individuals or entities for actions taken prior to the issuance of the TCO. Furthermore, any exclusions or exemptions are determined by the specific criteria outlined in the Customs Act 1901, particularly those goods listed in section 269SJ that cannot be subject to a TCO. Any extensions or restrictions of the application of this Act are managed through subordinate instruments as necessary.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0808303 under the Customs Act 1901 (sections 269C, 269P, and 269S) provide the framework for the creation of Tariff Concession Orders (TCOs). Under section 269C, 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. Section 269P mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, a written order (TCO) must be made declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269S specifies that a TCO is taken to have come into force on the day the application for the TCO was lodged. This means that the tariff concessions apply retroactively from the date the application was lodged, in this case, 15 May 2008.
The obligations and requirements imposed by the Act on the parties involved primarily concern the application process and the conditions under which a TCO can be granted. The CEO must ensure that the application does not pertain to goods specified in section 269SJ, which are ineligible for TCOs. Additionally, the CEO is required to verify that no substitutable goods were produced in Australia on the date the application was lodged, and to make a written order if the core criteria are met. Dixon Asia Pacific Pty Ltd, as the applicant, must submit a valid application that meets the criteria outlined in the Act. Furthermore, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made. In this instance, no submissions were received.
The Act also outlines the consequences for non-compliance. While specific offences and penalties are not detailed within this explanatory statement, general provisions within the Customs Act 1901 suggest that breaches of the Act may result in both civil and criminal penalties. These could include fines or imprisonment, depending on the severity and intent behind the breach. The exact penalties would be determined by the courts based on the specific circumstances of the case. It is important to note that the TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person, except for the Commonwealth. Importers, however, will be able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.