EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912299
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.
Transplumb Pty Ltd applied for a TCO in respect of certain portable electric hand wash basin on 14 April 2009.
Instrument
TCO No 0912299 was made on 10 July 2009. It declares that those certain portable electric hand wash basin 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. 0912299 is taken to have come into force on 14 April 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. 0912299, enacted in 2009, addresses the need for a streamlined process to apply tariff concessions on specific goods under the Customs Act 1901. The Customs Act 1901 established a framework where the Chief Executive Officer of Customs could grant Tariff Concession Orders (TCOs) to reduce customs duty on goods, provided certain conditions were met. This particular TCO was introduced in response to an application from Transplumb Pty Ltd for tariff concessions on certain portable electric hand wash basins. The legislation was enacted by the Parliament of Australia, with the intent to facilitate the import of goods by lowering the tariff rate, thus benefiting importers and potentially increasing the availability and affordability of such goods in the Australian market.
The policy objective of this TCO, as set out in the Customs Act 1901, is to ensure that the application for tariff concessions meets the core criteria, particularly that no substitutable goods are produced in Australia. This helps in protecting domestic industries while still allowing for the importation of goods that are not locally manufactured. The instrument was published in the Gazette to invite any interested parties to provide submissions, though none were received in this instance. The TCO came into force on the date the application was lodged, ensuring that the rights of importers are protected and they can apply for duty refunds on imports made since the effective date.
Scope and Application
The Tariff Concession Instrument No. 0912299, made under the Customs Act 1901, applies to the specific goods identified in the instrument, namely certain portable electric hand wash basins. The instrument was created in response to an application by Transplumb Pty Ltd and provides for a tariff concession, reducing the customs duty rate from the general 5% to free for these goods. This Act applies to the goods and the entities importing these goods, specifically targeting the industry involved in the importation of such items. The geographic and jurisdictional reach of this Act is national, applying across Australia as it is a Commonwealth instrument. However, the Act does not extend to goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a Tariff Concession Order. The Act may also be extended or restricted through subordinate instruments, though in this case, no such extensions or restrictions have been noted.
Key Provisions
The Customs Act 1901, particularly through Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) which can significantly reduce or eliminate customs duty on specified goods. Section 269F of the Act allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO if the goods in question are not prohibited by section 269SJ. The CEO is then tasked with assessing whether the application meets the core criteria outlined in section 269C, which includes the condition that no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269D and 269E. If these criteria are satisfied, the CEO must issue a written TCO, as stipulated in section 269P(3), effectively applying a lower or no customs duty on the specified goods.
The obligations imposed on parties by this legislation include ensuring that any TCO application adheres to the criteria set forth in the Act. Specifically, applicants must demonstrate that no substitutable goods are being produced in Australia, which involves a detailed examination of the production capabilities and current market offerings within Australia. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO. This ensures a degree of transparency and opportunity for stakeholders to voice their concerns regarding the proposed tariff concessions.
Failure to comply with the requirements of the Customs Act 1901, or breaching the terms of a TCO, can result in significant penalties. While the explanatory statement does not explicitly detail penalties, it is reasonable to infer that breaches of the Act or the terms of a TCO could lead to both civil and criminal consequences. Civil penalties might include fines or financial compensation, while criminal penalties could involve imprisonment. However, the exact penalties would be determined by the relevant sections of the Customs Act 1901 and any associated regulations. The importance of adherence to these obligations cannot be overstated, as non-compliance could result in severe repercussions for the entities involved.