EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0812759
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.
Abey Australia applied for a TCO in respect of certain mixer taps on 13 June 2008.
Instrument
TCO No 0812759 was made on 22 August 2008. It declares that those certain mixer taps 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. 0812759 is taken to have come into force on 13 June 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 for the regulation of imports and exports, including the imposition of customs duty on imported goods. The Act includes a scheme for Tariff Concession Orders (TCOs) which can reduce or eliminate the customs duty on certain goods. The Tariff Concession Instrument No. 0812759, introduced on 22 August 2008, addresses the gap in duty concessions for specific goods by allowing the Chief Executive Officer of Customs to grant a TCO if no substitutable goods are produced in Australia. The policy objective of this legislation is to provide tariff relief to importers of certain goods, thereby promoting trade and potentially reducing costs for businesses that import these goods. This concession is contingent on the goods not being produced domestically and the application meeting the criteria set out in the Act.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides the framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to individuals or entities that seek to import goods eligible for a reduced rate of customs duty under a TCO, provided the goods are not specified in section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO. For an application to be considered, it must meet the core criteria set out in section 269C, which stipulates that on the day the application is lodged, no substitutable goods should be produced in Australia in the ordinary course of business. The application process involves the CEO assessing whether the goods in question are substitutable and if they are produced domestically, with specific definitions provided in sections 269D, 269E, and 269F. Once the application is approved, a TCO is issued under section 269P(3), effectively reducing the customs duty on the specified goods. The geographic reach of this legislation is national, applying across all states and territories of Australia. The Tariff Concession Instrument No. 0812759, which was made on 22 August 2008, is an example of a TCO applied to certain mixer taps, reducing their duty rate from 5% to free. This instrument came into effect on the date of the application, 13 June 2008, and does not affect pre-existing rights or impose liabilities on any person.
Key Provisions
The Tariff Concession Order (TCO) No. 0812759, made under section 269F of the Customs Act 1901, permits a lower rate of customs duty for certain mixer taps. According to section 269P(3) of the Act, if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, a TCO must be issued. In this case, Abey Australia applied for a TCO for specific mixer taps on 13 June 2008, and the CEO issued TCO No. 0812759 on 22 August 2008, effective from the date of the application.
Section 269C of the Act 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. This definition is further clarified by sections 269D and 269E, which define 'goods produced in Australia' and 'ordinary course of business' respectively, and section 269E, which defines 'substitutable goods'. In this instance, the CEO was satisfied that no substitutable goods were produced in Australia, leading to the issuance of the TCO.
The obligations imposed by the Act on parties or entities governed by it include the requirement for the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting submissions from any person who considers that there are reasons why the TCO should not be made (subsection 269K(1)). In this case, the CEO did not receive any submissions in response to this invitation. Furthermore, section 269S(1) provides that a TCO is taken to have come into force on the day on which the application for the TCO was lodged. 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 in respect of anything done or omitted to be done before the date of registration.
The Act does not explicitly state any offences, penalties, or civil/criminal consequences for breach. However, the consequences of non-compliance with the requirements of the Act or the TCO could potentially include financial penalties or legal action. For instance, if an importer fails to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force, as permitted under paragraph 126(1)(r) of the Regulations, they could potentially face financial penalties. Additionally, any person found to be in breach of the TCO or the Act could potentially face legal action.