EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0930817
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.
Water Cooling International Australia applied for a TCO in respect of certain water distribution sprayer on 21 August 2009.
Instrument
TCO No 0930817 was made on 06 November 2009. It declares that those certain water distribution sprayer 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. 0930817 is taken to have come into force on 21 August 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 Australian Parliament to provide a comprehensive framework for the regulation and administration of customs and excise duties. Among its provisions, Part XVA introduced a scheme for Tariff Concession Orders (TCOs) which can be made by the Chief Executive Officer of Customs. This scheme aims to provide tariff concessions on certain goods, effectively reducing or eliminating customs duty on these items. The Tariff Concession Instrument No. 0930817, introduced in 2009, addresses the specific issue of applying tariff concessions to certain water distribution sprayers. The policy objective is to support the importation of these goods by removing customs duty, provided that no substitutable goods are produced in Australia, thereby fostering fair trade practices and potentially lowering costs for consumers and businesses.
Scope and Application
The Customs Act 1901, specifically under Part XVA, authorises the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the rate of customs duty on specified goods. An entity or individual can apply for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act, which lists those ineligible for TCOs. The CEO must determine if the application meets the core criteria, which include ensuring that no substitutable goods are produced in Australia at the time of the application. If these criteria are satisfied, the CEO is obligated to issue a written TCO. For instance, TCO No. 0930817 was issued on 6 November 2009, following an application by Water Cooling International Australia for a tariff concession on certain water distribution sprayers. This TCO effectively applies to these specific sprayers, reducing their duty rate to zero, whereas the general rate was 5%. The TCO's application is retroactive to the date of the application, 21 August 2009, and does not adversely affect any rights or impose liabilities on entities or individuals for actions taken prior to its issuance.
Key Provisions
The Tariff Concession Instrument No. 0930817, under the Customs Act 1901 (the Act), facilitates the application of a reduced customs duty rate for specific goods, in this case, certain water distribution sprayers, by establishing a Tariff Concession Order (TCO) (s 269C, s 269P(3)). When the Chief Executive Officer of Customs (the CEO) receives an application for a TCO, they must assess whether the application meets the core criteria, which include verifying that no substitutable goods are produced in Australia in the ordinary course of business at the time of application (s 269C, s 269SJ). If these criteria are satisfied, the CEO must issue a written order declaring the goods eligible for the concession (s 269P(3)). This specific TCO, number 0930817, was made on 6 November 2009, following an application by Water Cooling International Australia on 21 August 2009, and it declares that the certain water distribution sprayers are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5% (s 269P(3)).
The Act imposes several obligations on the parties involved in the TCO process. For instance, section 269K(1) mandates that the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested parties to submit their views on why the TCO should not be granted. In the case of TCO No. 0930817, no submissions were received in response to this notice. Additionally, section 269S(1) specifies that a TCO is deemed to have come into effect on the date the application was lodged, which for TCO No. 0930817, was 21 August 2009. The Act also ensures that the TCO does not affect the rights of any person, other than the Commonwealth, in a manner that would disadvantage them or impose liabilities for actions taken prior to the TCO's registration (s 269S(1)).
Breaching the provisions of the Customs Act 1901 can lead to various civil and criminal consequences. The Act does not specify particular offences or penalties related to TCOs in this context, but general provisions apply. For example, section 126 of the Customs Act 1901 allows for penalties for false statements or misleading information provided to the CEO in connection with customs matters, which could include fines and imprisonment. Similarly, section 244 of the Act penalises the fraudulent importation or exportation of goods, with penalties that could include fines and imprisonment. The specific penalties for breaches would depend on the nature and severity of the offence, as determined by the courts.