EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0824359
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 brass shower heads on 01 August 2008.
Instrument
TCO No 0824359 was made on 24 October 2008. It declares that those certain brass shower heads 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. 0824359 is taken to have come into force on 01 August 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. 0824359 was enacted under the Customs Act 1901 to address the need for tariff concessions for specific imported goods. The Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the administration of customs and excise duties, including the ability to issue Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The policy objective of this legislation is to facilitate the importation of certain goods by reducing or eliminating customs duty on them, provided they meet specific criteria such as not being substitutable by goods produced in Australia. The Explanatory Statement for this Instrument details that Abey Australia applied for a TCO for certain brass shower heads, which was granted on the basis that no substitutable goods were produced in Australia, resulting in the concession of duty from 5% to free. This legislative action was taken to ensure that the rights of importers are beneficially affected, allowing them to seek refunds on duties paid on such goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0824359 applies to goods specified in the application by Abey Australia for tariff concessions under Part XVA of the Customs Act 1901. This instrument, made by the Chief Executive Officer of Customs, pertains to certain brass shower heads which are subject to a lower rate of customs duty if no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. The Act specifies that a substitutable good is one that can be produced in Australia and used in a manner similar to the goods in question. The instrument, which came into force on the date of application, 1 August 2008, grants a concession reducing the duty from the general rate of 5% to free duty for the specified goods. The instrument does not affect any rights of persons other than the Commonwealth as at the date of registration and does not impose any liabilities on any person.
The instrument extends to the entire Commonwealth of Australia, affecting the importation of the specified goods nationwide. Any exclusions or exemptions from the application of the instrument are limited to those specified under section 269SJ of the Customs Act 1901, which outlines goods that cannot be subject to a tariff concession order. The instrument does not include any subordinate instruments that extend or restrict its application, and its effects are limited to the goods explicitly named within it.
Key Provisions
The key operative sections of the Customs Act 1901 (the Act) under the Tariff Concession Instrument No. 0824359 (the Instrument) include sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). Section 269C specifies the core criteria that the application must meet, primarily that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P mandates that if the CEO is satisfied that the application meets the criteria, they must make a written order declaring the goods subject to a lower rate of customs duty. Section 269S outlines the commencement of the TCO, which is deemed to come into effect on the date the application was lodged. In this instance, the TCO was made on 24 October 2008, and it applies to certain brass shower heads, reducing their duty rate from 5% to free.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that any TCO application is not in respect of goods specified in section 269SJ, which are ineligible for tariff concessions. Once an application is deemed valid, 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 (subsection 269K(1)). In this case, the CEO did not receive any submissions against the TCO for certain brass shower heads. Additionally, the TCO must be made in writing and specify the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
The Act also provides for consequences in the event of a breach. Although the explanatory statement does not detail specific offences, the general legal framework implies that any non-compliance with the provisions of the Customs Act 1901 could lead to civil or criminal penalties. For instance, knowingly making a false statement in a customs document, which might be related to tariff concessions, could result in fines or imprisonment under section 236 of the Act. The maximum penalties for such offences can be significant, with fines of up to $22,000 for individuals and $110,000 for corporations, as well as imprisonment terms that may vary based on the severity of the offence.