EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0914020
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.
Thermomix Australia applied for a TCO in respect of certain integrated electro thermic appliance on 28 April 2009.
Instrument
TCO No 0914020 was made on 24 July 2009. It declares that those certain integrated electro thermic appliance 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. 0914020 is taken to have come into force on 28 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 Customs Act 1901, enacted by the Parliament of Australia, governs the regulation of customs and excise in Australia. Within this framework, the Act introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This mechanism was designed to address the gap in providing tariff concessions for specific goods that are not produced in Australia, thereby encouraging import and consumption of such goods. The explanatory statement for Tariff Concession Instrument No. 0914020, enacted in 2009, details the application of this scheme to integrated electro thermic appliances, ensuring that the concession applies provided no substitutable goods are produced domestically. The policy objective is to facilitate the import of these appliances by setting their customs duty rate to free, aligning with the broader goal of supporting Australian consumption and industry standards.
Scope and Application
The Tariff Concession Instrument No. 0914020, made under the Customs Act 1901, applies to certain integrated electro thermic appliances by granting tariff concessions for these goods, thereby reducing the customs duty from the general rate of 5% to free. This instrument was initiated by an application from Thermomix Australia and was processed by the Chief Executive Officer of Customs (CEO), who determined that no substitutable goods were produced in Australia on the day the application was lodged. As a result, the CEO issued a Tariff Concession Order (TCO) effective from 28 April 2009, the date the application was made. The TCO applies specifically to the named goods outlined in the instrument and aims to benefit importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date, without imposing any new liabilities on any person. Importantly, the TCO does not disadvantage any person by affecting their rights as they stood on the date of registration, nor does it impose liabilities for actions taken before the registration date.
Key Provisions
The primary operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) include sections 269C, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. The CEO must decide whether the application meets the core criteria as specified in section 269C. If satisfied, the CEO is required to make a written order (TCO) under section 269P(3). The CEO must also publish a notice in the Gazette under subsection 269K(1) inviting any interested parties to submit any reasons why the TCO should not be made. Section 269SJ specifies goods that cannot be the subject of a TCO.
The Act imposes certain obligations on the parties involved in the TCO process. The applicant must ensure their application is not in respect of goods specified in section 269SJ. The CEO is obligated to assess whether the application meets the core criteria and, if satisfied, to make a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties. The TCO itself does not affect the rights of a person as at the date of registration to disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration.
For breach of any provision of the Act or its Regulations, various offences and penalties apply. Offences can range from providing false or misleading information, to failing to comply with the Act or Regulations. Civil penalties for such offences can include fines up to $22,200 for individuals and significantly higher amounts for corporations. Criminal penalties can include fines up to $275,000 for individuals and $1.375 million for corporations, as well as imprisonment for more serious breaches. The exact penalties depend on the nature and severity of the breach.