EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0835934
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.
M Spa's Pty Ltd applied for a TCO in respect of certain inflatable spa pool on 16 October 2008.
Instrument
TCO No 0835934 was made on 14 January 2009. It declares that those certain inflatable spa pool 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. 0835934 is taken to have come into force on 16 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 was enacted to provide a framework for the regulation of customs and excise duties in Australia, facilitating trade and protecting the revenue of the Commonwealth. To further refine and streamline the application of customs duties, the Act includes provisions for Tariff Concession Orders (TCOs), which can be made by the Chief Executive Officer of Customs. The Tariff Concession Instrument No. 0835934, enacted in 2009, addresses the need to provide tariff concessions on specific goods, in this case inflatable spa pools, when no substitutable goods are produced in Australia. The instrument was introduced to assist businesses by reducing the customs duty on these goods from the general rate to zero, thereby promoting economic activity and reducing the cost burden on importers. The decision to implement this concession was made by the Chief Executive Officer of Customs following a formal application by M Spa’s Pty Ltd, and no objections were received during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 0835934, made under section 269F of the Customs Act 1901, applies to goods specified in the instrument, namely certain inflatable spa pools. The Act allows for the application of tariff concessions to goods that meet specific criteria, ensuring that a lower rate of customs duty applies to those goods. The instrument was made following an application by M Spa's Pty Ltd, and it was effective from 16 October 2008, the date on which the application was lodged. The CEO of Customs determined that the application met the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged. As a result, the CEO issued the instrument, which declares that the specified inflatable spa pools are subject to a free rate of duty, rather than the general rate of 5%.
The scope of this instrument is limited to the goods specified within it and does not extend to any other goods unless they are subject to a separate Tariff Concession Order. The instrument's geographic reach is national, as it applies across Australia. There are no stated exclusions or exemptions within the instrument itself, although the Act includes provisions that certain goods cannot be subject to a TCO. The application process for a TCO includes a requirement for the CEO to publish a notice in the Gazette, inviting submissions from any interested parties; however, no submissions were received in relation to this particular instrument. The instrument does not affect the rights of any person in relation to actions taken before its effective date and provides potential benefits to importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force.
Key Provisions
The Tariff Concession Instrument No. 0835934, under the Customs Act 1901, pertains to certain inflatable spa pools and applies a concessional rate of customs duty, specifically item 50 of Schedule 4 to the Customs Tariff Act 1995, which is set at free duty instead of the general rate of 5%. This concession was made following an application by M Spa's Pty Ltd on 16 October 2008, and the instrument was issued on 14 January 2009 (section 269P(3)). The core criteria for this concession were met because, on the date the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business (section 269C).
The obligations imposed by the Act on the parties involved are primarily procedural. For instance, the CEO of Customs must ensure that the application for a Tariff Concession Order (TCO) is valid and meets the core criteria outlined in the Act (section 269F). Once an application is accepted as valid, the CEO must publish a notice in the Gazette, inviting submissions from any interested parties who might object to the TCO (subsection 269K(1)). In this case, no objections were received. Additionally, the CEO must make a written order declaring that the goods in question are eligible for the concessional duty rate (section 269P(3)).
The Act does not explicitly state any criminal or civil penalties for breaches of its provisions regarding TCOs. However, any misuse of the concessional duty rate, such as incorrectly claiming a tariff concession, could potentially lead to administrative actions or penalties under other sections of the Customs Act 1901 or related regulations. The general principle is that the TCO does not disadvantage any person or impose liabilities for actions taken prior to the date of registration (subsection 269S(1)).
The rights of importers are beneficially affected by this TCO. Importers can apply for a refund of duty on goods imported since the TCO is deemed to have come into force on 16 October 2008, the date the application was lodged (subsection 269S(1)). This refund process is facilitated under paragraph 126(1)(r) of the Regulations, which allows for the adjustment of duties paid on eligible goods. The TCO itself does not impose any new liabilities on any person, thereby safeguarding the interests of those who have already engaged in importing activities prior to the concession's implementation.