EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0824440
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.
Franke Australia Pty Ltd applied for a TCO in respect of certain single lever mixer taps on 01 August 2008.
Instrument
TCO No 0824440 was made on 17 October 2008. It declares that those certain single lever 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. 0824440 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the administration of customs and excise duties in Australia. This Act aims to streamline the process by which certain goods may be subject to tariff concessions, reducing the customs duty imposed on these goods. Specifically, the Customs Act 1901 establishes a scheme under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) for goods where no substitutable goods are produced in Australia. The objective of this scheme is to foster economic efficiency by reducing the cost of certain imported goods, thereby promoting competitive markets and benefiting consumers and businesses. Tariff Concession Instrument No. 0824440, made under the authority of this Act, addresses the specific case of certain single lever mixer taps, granting them tariff concessions from 1 August 2008, the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0824440 under the Customs Act 1901 applies to single lever mixer taps and specifically pertains to the application of a lower rate of customs duty on these goods. The Act is administered by the Chief Executive Officer of Customs (CEO), who is responsible for deciding whether a Tariff Concession Order (TCO) application meets the core criteria outlined in section 269C of the Act. This decision process hinges on the absence of substitutable goods produced in Australia, as defined in section 269D and 269E of the Act, and the absence of the goods in question being specified in section 269SJ, which lists goods that cannot be subject to a TCO. The geographic reach of this Act is national, given its Commonwealth nature. The Act does not impose any liabilities on any person and does not disadvantage any person's rights as at the date of registration. The application for a TCO must be lodged with the CEO, and while the CEO must publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made, no such submissions were received for this particular TCO.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0824440 under the Customs Act 1901 (the Act) establish a framework for the application and approval of Tariff Concession Orders (TCOs) (sections 269C and 269P(3)). Section 269C of the Act sets out the core criteria that must be met for a TCO to be granted, which includes ensuring that no substitutable goods are produced in Australia on the date the application is lodged. This is further defined in section 269D, which explains what constitutes 'goods produced in Australia', and in section 269E, which describes 'ordinary course of business'. Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they must issue a written order (a TCO) specifying the goods and the applicable rate of duty, as detailed in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed on parties by the Act include the requirement for applicants to ensure their applications meet the core criteria specified in section 269C. This involves demonstrating that no substitutable goods were produced in Australia on the application date. The CEO, on receiving an application, must assess it against these criteria and, if satisfied, proceed to issue a TCO. Additionally, the CEO is required to publish a notice in the Gazette (subsection 269K(1)), inviting submissions from any interested parties who may have reasons why the TCO should not be granted. If no submissions are received, the CEO can proceed to make the TCO.
For breaches of the provisions outlined in the Customs Act 1901, the Act does not explicitly state penalties but refers to the broader Customs Act 1901 and associated regulations, which could include fines and imprisonment. Under the Customs Act 1901, offences related to false or misleading statements, or non-compliance with customs regulations, could result in significant penalties. For example, under section 233 of the Customs Act 1901, an offence involving false statements or documents can incur a penalty of up to 10,000 penalty units or imprisonment for up to 10 years, or both. Similarly, non-compliance with TCO conditions could result in the revocation of the concession, with potential civil or criminal consequences as outlined in the broader customs legislation.