EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0834896
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 Pty Ltd applied for a TCO in respect of certain sanitary ware on 10 October 2008.
Instrument
TCO No 0834896 was made on 14 January 2009. It declares that those certain sanitary ware 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. 0834896 is taken to have come into force on 10 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 Tariff Concession Instrument No. 0834896, enacted in 2009, amends the Customs Act 1901 to provide tariff concessions for certain sanitary ware imported into Australia. This legislative instrument responds to an application by Abey Australia Pty Ltd for a Tariff Concession Order (TCO) which was approved by the Chief Executive Officer of Customs, as no substitutable goods were being produced in Australia at the time of application. The instrument aims to support Australian importers by reducing the customs duty on these specific goods from the general rate of 5% to a free rate, effective from the date of the application, 10 October 2008. The Tariff Concession Order was published in the Gazette with an invitation for public submissions, none of which were received. Consequently, the TCO came into force on the date of the application, ensuring that no pre-existing rights or liabilities of any party are adversely affected.
Scope and Application
The Tariff Concession Instrument No. 0834896 applies to the goods for which Abey Australia Pty Ltd applied, namely certain sanitary ware, as declared under the Customs Act 1901. The Act allows for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that provide a lower rate of customs duty on specific goods. The TCO is applicable to the goods for which the application was made, and in this instance, the CEO was satisfied that no substitutable goods were produced in Australia, allowing for the concession. The TCO provides a duty-free rate on these goods, which otherwise have a general duty rate of 5%. This instrument applies nationally as it is an instrument under the Commonwealth Customs Act 1901. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person. The TCO does not affect any existing rights or liabilities incurred prior to its registration. The scope of the TCO is limited to the specific goods mentioned and does not extend to other goods unless specifically covered by a different TCO.
Key Provisions
The primary operative sections of this legislation, specifically Tariff Concession Instrument No. 0834896 under the Customs Act 1901, pertain to the establishment of a Tariff Concession Order (TCO) for certain sanitary ware, as outlined in section 269F (subsection 269P(3)). An applicant, such as Abey Australia Pty Ltd, may apply to the Chief Executive Officer (CEO) of Customs for a TCO if the goods in question do not fall under the restrictions specified in section 269SJ. If the CEO determines that the application meets the core criteria laid out in section 269C, which requires that no substitutable goods were produced in Australia on the date the application was lodged, the CEO is mandated to issue a written order declaring that the goods are subject to a specific item in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes certain obligations on both the applicant and the CEO. For the applicant, the obligation is to submit a valid application to the CEO, ensuring that the goods in question do not fall under the prohibitions outlined in section 269SJ. The CEO, on the other hand, must assess whether the application meets the core criteria and, if satisfied, make the TCO as required by section 269P(3). Additionally, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any interested parties who may have reasons to oppose the TCO, although in this case, no submissions were received.
In terms of penalties and consequences, the Act does not specify explicit offences or penalties for breaching the conditions of a TCO. However, the legislation ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, as per subsection 269S(1). The TCO also does not impose any new liabilities on any person. Importers, however, may benefit from the TCO by applying for a refund of duty on goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations. This refund mechanism ensures that the rights of importers are beneficially affected without imposing any new liabilities.