EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0925820
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.
Johnson Pump Australia applied for a TCO in respect of certain marine toilets on 21 July 2009.
Instrument
TCO No 0925820 was made on 02 October 2009. It declares that those certain marine toilets 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. 0925820 is taken to have come into force on 21 July 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 was enacted by the Parliament of Australia to provide a framework for the administration of customs and excise duties. The Act, which has been amended several times since its inception, was introduced to address the need for a structured approach to the regulation and control of goods entering and leaving the country. One specific aspect of this Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which aim to provide relief from customs duties under certain circumstances. In 2009, Tariff Concession Instrument No. 0925820 was made to provide a tariff concession for certain marine toilets, reflecting the policy objective to facilitate the importation of goods that are not produced domestically, thus supporting trade and economic interests. This instrument was enacted following an application by Johnson Pump Australia, and no submissions were received in opposition to the concession, indicating broad acceptance of the measure.
Scope and Application
The Tariff Concession Instrument No. 0925820, made under the Customs Act 1901, applies to entities or individuals seeking a reduction in customs duty on specific goods, in this case, certain marine toilets, by obtaining a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs. This instrument specifically targets those goods for which no substitutable products are produced in Australia, thereby qualifying them for a lower rate of duty as stipulated in the Customs Tariff Act 1995. The scope of this legislation is limited to the goods specified in the TCO, and it does not affect the rights of any person, except for potentially benefiting importers who can apply for a refund of duty on goods imported since the TCO's effective date. The TCO does not impose any liabilities on any person, and it came into effect on the date the application was lodged, which was 21 July 2009. Any broader application or exclusions are managed through subordinate instruments, which may further define the specific conditions and parameters of the concession.
Key Provisions
The primary operative sections of this legislation (section 269F) allow for the application of Tariff Concession Orders (TCO) for specific goods by interested parties, such as importers. If an application is made, the Chief Executive Officer of Customs (section 269P) is required to determine whether the application meets the core criteria, which include assessing whether substitutable goods are produced in Australia in the ordinary course of business (sections 269C and 269D). If the application meets these criteria, the CEO must issue a TCO, effectively applying a lower rate of duty to the specified goods (section 269P(3)). In this case, Johnson Pump Australia successfully applied for a TCO for certain marine toilets, resulting in the application of a zero duty rate instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO must consider applications for TCOs and determine whether they meet the core criteria, including ensuring no substitutable goods are produced domestically (section 269C). The CEO is also mandated to publish a notice in the Gazette, inviting submissions from interested parties if a TCO application is accepted as valid (subsection 269K(1)). The CEO must review any submissions received and make a decision on the TCO application based on the evidence presented. Additionally, importers who benefit from a TCO can apply for a refund of any duty paid on goods imported before the TCO came into effect (paragraph 126(1)(r) of the Regulations).
Failure to comply with the requirements of the Customs Act 1901 may result in various offences and penalties. For instance, if an entity knowingly makes a false or misleading statement in an application for a TCO, they may face criminal charges and potential fines. The maximum penalties for such offences can be significant, as outlined in the relevant sections of the Customs Act and any subsidiary legislation. The Act also provides for the imposition of civil penalties for breaches of its provisions, which can include fines and other sanctions deemed appropriate by the court. It is crucial for all parties involved to adhere to the requirements of the Act to avoid any legal repercussions.