EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0828351
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.
Major Electrical Appliances Pty Ltd applied for a TCO in respect of certain plate warmers on 27 August 2008.
Instrument
TCO No 0828351 was made on 21 November 2008. It declares that those certain plate warmers 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. 0828351 is taken to have come into force on 27 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 was enacted by the Parliament of Australia to establish a framework for the regulation of customs and excise duties. The Act was introduced to provide a structured approach to the management of import and export activities, ensuring compliance and revenue collection. One of its components, the Tariff Concession Orders (TCOs) under Part XVA, was designed to address the issue of applying preferential customs duties on certain imported goods that do not have Australian-made equivalents. This allows for the importation of goods that are not produced domestically, provided that they meet specific criteria, thereby promoting trade and potentially reducing costs for consumers. The Customs Act 1901 empowers the Chief Executive Officer of Customs to make these orders, ensuring that the process is both transparent and accountable, with opportunities for public consultation.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) mechanism, applies to individuals and entities seeking a concession on customs duties for specific goods. This Act allows the Chief Executive Officer of Customs to grant lower customs duty rates on goods, provided certain criteria are met and the goods do not fall under the list of exceptions specified in section 269SJ. The application process involves demonstrating that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F. Once an application is accepted and no objections are raised, the CEO issues a written TCO, which can be subject to further interpretation or regulation through subordinate instruments. The TCO applies nationally and impacts the rights of importers by potentially allowing them to claim refunds for duties paid on the specified goods prior to the effective date of the TCO, without imposing any new liabilities on third parties.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0828351 under the Customs Act 1901 (section 269P(3)) mandate that the Chief Executive Officer of Customs (CEO) must make a written order (Tariff Concession Order or TCO) if satisfied that a TCO application meets the core criteria. This means that the application is not for goods specified in section 269SJ, and on the application date, no substitutable goods were produced in Australia (section 269C). The TCO declares that certain plate warmers are subject to item 50 of Schedule 4 to the Tariff, resulting in a duty rate of free instead of the general rate of 5%.
The Act imposes specific obligations on parties involved. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions on a TCO application. In this case, no submissions were received. Moreover, section 269S(1) stipulates that a TCO comes into force on the day the application is lodged. Consequently, TCO No. 0828351 took effect on 27 August 2008. Importers of the affected goods can apply for a refund of duty under paragraph 126(1)(r) of the Regulations for goods imported since the TCO’s effective date.
The Act does not explicitly outline specific offences, penalties, or consequences for breach concerning the TCO. However, the general framework of the Customs Act 1901 and associated regulations imply that any misuse or fraudulent claims regarding the TCO could result in penalties. These may include fines, imprisonment, or both, depending on the severity of the breach. The maximum penalties would be consistent with those provided under the broader customs and excise legislation, which could involve substantial financial penalties and imprisonment terms for serious violations.