EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0909029
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.
Bradley Washfountain applied for a TCO in respect of certain sanitaryware on 17 March 2009.
Instrument
TCO No 0909029 was made on 05 June 2009. It declares that those certain sanitaryware 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. 0909029 is taken to have come into force on 17 March 2009.
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. 0909029, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on certain imported goods that are not produced domestically. The instrument was formulated to provide relief from customs duties for specified goods, in this case, certain sanitaryware, where it was determined that no substitutable goods were produced in Australia. The objective, as outlined in the Act, is to provide a mechanism for the Chief Executive Officer of Customs to assess applications and make Tariff Concession Orders (TCOs) when the core criteria are met, thereby reducing the duty burden on certain imported goods. The instrument was enacted by the relevant authority under the Customs Act 1901 and aims to facilitate trade by making it more cost-effective to import certain goods that are not produced locally.
Scope and Application
The Tariff Concession Instrument No. 0909029, made under the Customs Act 1901, applies specifically to goods for which a Tariff Concession Order (TCO) is sought, and these goods must not be specified in section 269SJ of the Act, which excludes certain goods from eligibility for a TCO. This instrument pertains to an application made by Bradley Washfountain for a TCO on certain sanitaryware, and the scope of the legislation is limited to these particular goods. The instrument is effective from the date the application was lodged, 17 March 2009, and it grants a tariff concession that reduces the customs duty on the specified sanitaryware from the general rate of 5% to zero. This order is applicable nationally and operates within the framework set by the Customs Act 1901 and the Customs Tariff Act 1995. The CEO of Customs, upon being satisfied that the application meets the criteria outlined in the Act, issued the TCO after ensuring no substitutable goods were produced in Australia, as per the definitions in the Act. The application of this TCO benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, without imposing any new liabilities on individuals or entities.
Key Provisions
The main operative sections of this legislation (Tariff Concession Instrument No. 0909029) are sections 269C, 269P, and 269SJ of the Customs Act 1901. Section 269C stipulates that an application for a Tariff Concession Order (TCO) will meet the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P details the process whereby, if the Chief Executive Officer of Customs (CEO) is satisfied that an application meets the core criteria, a written TCO must be made declaring that the goods subject to the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269SJ sets out the goods that cannot be subject to a TCO. In this case, Instrument TCO No. 0909029 was made on 5 June 2009, declaring that certain sanitaryware 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 obligations imposed by this Act on the parties it governs are primarily centred around the application and assessment process for a TCO. The CEO must assess whether an application meets the core criteria, which includes ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO determines that the application meets the core criteria, they must make a written TCO. This obligation also includes publishing a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. In this specific case, the CEO did not receive any submissions in response to the notice.
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breach. However, it is implied that any breach of the conditions or misrepresentation in the application process could potentially lead to legal consequences. For instance, if a party were to falsely claim that no substitutable goods were produced in Australia, this could result in a breach of the Act’s provisions. Although the Act does not specify maximum penalties, any breaches could potentially be addressed under the general provisions of the Customs Act 1901 or other relevant legislation, which might include fines or other penalties as determined by the court.