EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0834522
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.
E D Oates Pty Ltd applied for a TCO in respect of certain toilet brushes on 8 October 2008.
Instrument
TCO No 0834522 was made on 12 January 2009. It declares that those certain toilet brushes 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. 0834522 is taken to have come into force on 8 October 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 Australian Parliament, establishes a framework for the imposition and remission of customs duties, and includes provisions for Tariff Concession Orders (TCOs) that can be made by the Chief Executive Officer of Customs to provide tariff concessions on certain goods. The Tariff Concession Instrument No. 0834522, made on 12 January 2009, addresses the specific issue of applying tariff concessions to certain toilet brushes, reducing the duty from the general rate of 5% to free. The CEO determined that no substitutable goods were produced in Australia at the time the application was lodged, thus satisfying the core criteria under section 269C of the Act. This instrument aims to facilitate the importation of these specific goods without the burden of customs duty, thereby benefiting importers who can apply for refunds on duties paid before the concession took effect.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs) provisions, applies to both individuals and entities seeking tariff concessions for certain imported goods. This Act facilitates the application process whereby entities, such as E D Oates Pty Ltd, can apply for a TCO if they can demonstrate that no substitutable goods are produced in Australia in the ordinary course of business. The Act mandates that the Chief Executive Officer of Customs (CEO) must consider applications under section 269F and determine if they meet the core criteria outlined in section 269C. Once a TCO is issued, the specified goods are subject to a lower rate of customs duty as per the prescribed item of Schedule 4 to the Customs Tariff Act 1995. The geographic reach of the Act is national, impacting all imports into Australia. Importantly, the Act ensures that the rights of third parties are not adversely affected by the issuance of a TCO, thus maintaining fairness and protecting stakeholders' interests. Any exclusions or exemptions are limited to goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The Act's application can be further refined through subordinate instruments, ensuring flexibility and precision in its implementation.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0834522, made under the Customs Act 1901, pertain to the concession of customs duty on certain toilet brushes. The instrument, TCO No. 0834522, was made on 12 January 2009, following an application by E D Oates Pty Ltd on 8 October 2008. This instrument declares that certain toilet brushes are subject to a prescribed item of Schedule 4 of the Customs Tariff Act 1995, specifically item 50, which results in a tariff rate of free customs duty for these goods (section 269P(3)). This contrasts with the general rate of 5% customs duty applicable to such goods (section 269P(3)).
The Act imposes several obligations on the parties involved. Section 269C mandates that a Tariff Concession Order (TCO) application must meet core criteria, primarily that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269K(1) requires the Chief Executive Officer of Customs (the CEO) to publish a notice in the Gazette after accepting a TCO application as valid, inviting any interested party to lodge submissions if they believe the TCO should not be made. In this case, no submissions were received in response to the published notice.
Breaching the requirements set out in the Customs Act 1901 may result in various consequences. The Act does not explicitly detail specific offences or penalties for failing to comply with the TCO process, but general customs offences could apply. These may include civil or criminal penalties such as fines or imprisonment, depending on the nature and severity of the breach. The maximum penalties for such breaches would align with the general provisions of the Customs Act 1901, which can be severe, reflecting the importance of compliance with customs regulations. Additionally, failure to adhere to the terms of the TCO could result in the invalidation of the concession, leading to the application of the general duty rate to the affected goods.