EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0824733
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 basket strainers on 04 August 2008.
Instrument
TCO No 0824733 was made on 24 October 2008. It declares that those certain basket strainers 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. 0824733 is taken to have come into force on 04 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. 0824733, enacted in 2008, addresses a specific gap in the Customs Act 1901 by facilitating the application of lower customs duty rates to certain imported goods through the issuance of Tariff Concession Orders (TCOs). The instrument was introduced to streamline the process for applying and approving tariff concessions, ensuring that businesses can more readily access reduced duty rates on goods not produced domestically. The Customs Act 1901, enacted by the Commonwealth Parliament, outlines the framework for customs duties and the mechanisms through which tariff concessions can be applied. The policy objective behind this instrument is to provide economic benefits to importers by reducing the cost of importing specific goods, thereby enhancing their competitiveness and potentially lowering consumer prices. This measure is designed to support businesses by mitigating the financial burden of customs duties on goods that do not have Australian-made alternatives.
Scope and Application
The Tariff Concession Instrument No. 0824733, which is part of the Customs Act 1901, applies to individuals or entities seeking tariff concessions for specific goods imported into Australia. The act specifically targets the application process for Tariff Concession Orders (TCOs) and governs the circumstances under which a lower rate of customs duty can be applied to certain goods. The scope of the act includes the application procedures, criteria for approval, and the conditions under which the CEO of Customs may grant a TCO. It also specifies that certain goods, as outlined in section 269SJ of the Act, are ineligible for tariff concessions. The act applies nationally across Australia and is subject to federal jurisdiction. It should be noted that the application of this act may be extended or restricted through subordinate instruments. The act does not disadvantage any person, including importers, who may benefit from duty refunds on goods imported after the TCO's effective date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0824733 under the Customs Act 1901 (section 269P(3)) provide that if the Chief Executive Officer of Customs (the CEO) is satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria, they must make a written order declaring that the goods in question are subject to a prescribed rate of duty in Schedule 4 of the Customs Tariff Act 1995. Specifically, section 269C states that an application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Additionally, section 269SJ outlines that certain goods cannot be subject to a TCO, and section 269S(1) specifies that a TCO is taken to have come into force on the day the application for the TCO was lodged.
The obligations imposed on parties by this Act include the requirement for applicants, such as Franke Australia Pty Ltd, to ensure that their applications meet the core criteria specified in the Act. This involves demonstrating that no substitutable goods were produced in Australia on the date of application. The CEO is obligated to assess each application against these criteria and, if satisfied, to make a written TCO. The CEO is also required to publish a notice in the Gazette, inviting submissions from any person who may have reasons why the TCO should not be made (section 269K(1)). The CEO must consider these submissions, if any are received, before deciding on the application.
Failure to comply with the provisions of the Customs Act 1901 regarding the making of TCOs can result in significant consequences. While the explanatory statement does not specify particular offences, breaches of the Act could lead to civil or criminal penalties depending on the nature and severity of the breach. For example, incorrect or fraudulent applications might be subject to penalties under the general administrative penalties provisions of the Act, which could include fines or other sanctions. The exact penalties would depend on the specific circumstances of the breach and any applicable legislation governing administrative penalties.