EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0934178
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.
Caroma Industries applied for a TCO in respect of certain sanitary ware and or firing setters pressure casting plant on 11 September 2009.
Instrument
TCO No 0934178 was made on 27 Novemebr 2009. It declares that those certain sanitary ware and or firing setters pressure casting plant 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. 0934178 is taken to have come into force on 11 September 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 Commonwealth Parliament, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs to apply lower rates of customs duty on certain goods. The Act was introduced to address the need for a mechanism that allows for the reduction of customs duties on goods, provided certain conditions are met. Specifically, TCOs can be made when the goods in question are not substitutable and are not produced in Australia. The policy objective is to encourage the importation of goods that are not domestically produced, thereby benefiting consumers and supporting the competitive landscape. In 2009, Caroma Industries applied for a TCO on certain sanitary ware and firing setters pressure casting plant, which was subsequently approved by the CEO of Customs, resulting in a tariff concession that effectively set the duty rate at zero.
Scope and Application
The Tariff Concession Instrument No. 0934178 is a specific order under the Customs Act 1901, which pertains to the application of tariff concessions on certain goods. This instrument applies to the specific case of Caroma Industries' application for tariff concessions on certain sanitary ware and firing setters pressure casting plant. The act applies to any entity or individual seeking tariff concessions on goods not produced in Australia, as outlined in section 269F of the Act. The CEO of Customs is responsible for determining the validity of these applications and ensuring they meet the core criteria specified in sections 269C, 269B, and 269D of the Act. The geographic and jurisdictional reach of this legislation is national, applying across Australia as per the provisions of the Customs Act 1901. The instrument does not explicitly state exclusions or exemptions, but it does stipulate that the concessions do not affect existing rights or impose liabilities on persons other than the Commonwealth, as per subsection 269S(1) of the Act. Any further specifications or extensions of the application of this instrument may be provided through subordinate instruments, although this specific instrument does not elaborate on such provisions.
Key Provisions
The Tariff Concession Instrument No. 0934178, made under section 269F of the Customs Act 1901 (section 269F), pertains to the application of a Tariff Concession Order (TCO) for certain sanitary ware and firing setters pressure casting plant. This instrument was made by the Chief Executive Officer of Customs (CEO) on 27 November 2009, following an application by Caroma Industries on 11 September 2009 (section 269F). It declares that the specified goods are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, specifically item 50, because the CEO was satisfied that no substitutable goods were produced in Australia on the date the application was lodged (section 269P(3)). This results in the goods subject to the TCO being exempt from the general rate of duty of 5%, instead applying a rate of duty that is free.
In terms of obligations, the CEO has a duty to consider applications for TCOs, assess whether they meet the core criteria (section 269C), and, if satisfied, make a written order (section 269P(3)). The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). In this case, no submissions were received (subsection 269K(1)). Once the application is accepted and the TCO is made, it is taken to have come into force on the date the application was lodged (subsection 269S(1)).
Under the Customs Act 1901, failure to comply with the requirements of a TCO may result in civil and criminal penalties. For instance, knowingly making a false statement in an application for a TCO could result in a penalty of up to 10,000 penalty units or imprisonment for five years, or both, as stipulated in section 273 of the Act. Additionally, failure to comply with the terms of a TCO could result in financial penalties or other enforcement actions as deemed appropriate by the CEO or the courts. It is important for all parties involved to adhere to the obligations and requirements of the Act to avoid such consequences.