EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840490
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 domestic showering system on 20 November 2008.
Instrument
TCO No 0840490 was made on 06 February 2009. It declares that those certain domestic showering system 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. 0840490 is taken to have come into force on 20 November 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, provides a framework for the regulation of customs and excise duties, and includes provisions for the creation of Tariff Concession Orders (TCOs). The Customs Act 1901 addresses the problem of ensuring that Australian industries remain competitive by reducing the customs duty on certain imported goods where no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0840490, issued in 2009, aims to grant a tariff concession for certain domestic showering systems, reducing the duty rate from 5% to free, based on the absence of substitutable goods produced locally. This measure is designed to benefit importers by potentially allowing them to claim a refund of duty on the importation of these goods since the effective date of the TCO, without imposing any new liabilities on non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 0840490 under the Customs Act 1901 applies to any person or entity seeking a tariff concession order (TCO) for specific goods, in this case, domestic showering systems. The legislation is concerned with the conditions under which the Chief Executive Officer (CEO) of Customs can grant a TCO, thereby reducing the customs duty on the specified goods. The act applies to the Commonwealth of Australia and governs the process for applying for and granting a TCO, including the criteria that must be satisfied for such a concession to be approved. The CEO must ensure that the application is not in respect of goods specified in section 269SJ of the Act and must verify that no substitutable goods are produced in Australia on the date the application was lodged. The act also outlines the commencement of the TCO and the rights of the applicants and other stakeholders, ensuring that the TCO does not disadvantage any person other than the Commonwealth or impose liabilities on them for actions taken before the TCO's effective date. The scope of this legislation is limited to the application and approval process for TCOs as specified in the Customs Act 1901 and does not extend to other types of concessions or exemptions.
Key Provisions
The Tariff Concession Instrument No. 0840490 under the Customs Act 1901 (section 269C) provides for tariff concessions on certain domestic showering systems. The instrument, made on 6 February 2009, specifies that these goods are subject to a duty-free regime under item 50 of Schedule 4 to the Customs Tariff Act 1995. This applies because, on the date the application was lodged (20 November 2008), no substitutable goods were being produced in Australia in the ordinary course of business (section 269P(3)).
The obligations imposed by this Act on the parties involved primarily revolve around the process of applying for and receiving a Tariff Concession Order (TCO). For the applicant, such as Abey Australia Pty Ltd, the obligation lies in demonstrating that no substitutable goods are produced in Australia and that the goods in question are eligible for tariff concessions. The Chief Executive Officer of Customs (CEO) must then review the application and ensure it meets the core criteria outlined in the Act (section 269C). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who may have objections to the concession being granted (subsection 269K(1)). In this case, no submissions were received.
Failure to comply with the provisions of the Customs Act 1901 could result in various penalties. While the explanatory statement does not detail specific offences or penalties under this TCO, general provisions within the Act outline potential consequences for breaches. For instance, section 235 of the Act provides for civil penalties for non-compliance with customs regulations, which can include fines up to $11,100 for individuals and $55,500 for corporations, along with potential criminal penalties. Additionally, the Act may impose administrative penalties for incorrect or fraudulent declarations, which can lead to financial penalties and legal action. It is important for all parties to adhere to the requirements to avoid these consequences.