EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0815156
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.
Permaseal Electrical Appliances Pty Ltd applied for a TCO in respect of certain metal laundry hampers on 30 June 2008.
Instrument
TCO No 0815156 was made on 19 September 2008. It declares that those certain metal laundry hampers 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. 0815156 is taken to have come into force on 30 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 Tariff Concession Instrument No. 0815156, enacted in 2008 under the Customs Act 1901, was introduced to address the issue of providing tariff concessions for specific goods that are not produced in Australia and for which there are no substitutable alternatives. This legislative instrument enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to certain goods, provided that the application meets the core criteria outlined in the Act. Specifically, the Act mandates that a TCO can only be issued if no substitutable goods are produced in Australia at the time the application is lodged. The primary objective of this instrument is to promote trade by reducing the cost of importing specific goods, thereby benefiting importers who can apply for duty refunds on those goods imported since the TCO came into effect. The instrument was enacted by the Australian Parliament and does not impose any liabilities on individuals or entities, ensuring that existing rights are protected.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to specific goods, granting them a lower rate of customs duty as stipulated in Schedule 4 to the Customs Tariff Act 1995. A person may apply to the CEO for a TCO concerning goods not specified in section 269SJ of the Act, which outlines goods ineligible for such concessions. The CEO must determine if the application meets the core criteria set out in section 269C, which mandates that no substitutable goods were produced in Australia in the ordinary course of business at the time of application. This application process ensures that only those goods for which there is no Australian-made substitute can benefit from tariff concessions.
The geographic and jurisdictional reach of this legislation is Commonwealth-wide, with the application of TCOs extending nationally. The scope of the Act is limited by exclusions under section 269SJ, which specifies certain goods that cannot be subject to a TCO. Additionally, the Act does not disadvantage any person or impose liabilities on any person in respect of actions taken before the TCO's registration, safeguarding existing rights. The commencement of a TCO is effective from the date the application is lodged, as per subsection 269S(1), with no retroactive application affecting pre-existing rights or liabilities.
Key Provisions
The Customs Act 1901 (the Act) contains provisions for Tariff Concession Orders (TCOs), as detailed in Part XVA, which are subject to approval by the Chief Executive Officer of Customs (the CEO). Under section 269F, individuals or entities can apply for a TCO for goods, provided the goods are not prohibited by section 269SJ. The CEO must assess if the application meets the core criteria, which include ensuring no substitutable goods are produced in Australia on the application date (section 269C). If satisfied, the CEO issues a written TCO, specifying the goods and the applicable tariff item (section 269P(3)).
The Act imposes specific obligations on the parties involved. For applicants, it is crucial to ensure the goods in question meet the criteria for a TCO, specifically that no substitutable goods are produced in Australia. The CEO has the duty to review applications and determine eligibility based on the outlined criteria. Furthermore, section 269K(1) requires the CEO to publish notices in the Gazette inviting public submissions on the proposed TCO. This ensures transparency and allows interested parties to voice their opinions or objections.
Breaching the provisions of the Act or failing to comply with the requirements can lead to various consequences. If an entity falsely claims that no substitutable goods are produced in Australia, and a TCO is granted based on this false information, it could result in civil or criminal penalties. While the explanatory statement does not detail specific penalties, breaches of customs laws generally can lead to fines and, in severe cases, criminal charges. The precise penalties would depend on the nature and extent of the breach, as outlined in the applicable sections of the Customs Act and related regulations.
For importers, the TCO can be beneficial as they may apply for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not affect the rights of any person adversely if applied to actions taken before its registration. This means that no existing liabilities or rights are impacted by the TCO, ensuring legal clarity and protection for all parties involved.
Overall, the Act and its accompanying TCO provisions create a structured framework for tariff concessions, ensuring fair and transparent processes while protecting the rights and interests of all stakeholders. The CEO’s role is pivotal in assessing applications, maintaining the integrity of the tariff concession scheme, and facilitating trade by providing tariff relief where appropriate.