EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0946753
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.
Sunbeam Corporation Ltd applied for a TCO in respect of certain hot drink makers on 02 December 2009.
Instrument
TCO No 0946753 was made on 26 February 2010. It declares that those certain hot drink makers 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. 0946753 is taken to have come into force on 02 December 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. 0946753, enacted under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods by allowing for the application of reduced customs duties. This instrument was introduced to facilitate access to essential goods by reducing financial barriers for importers. The instrument was enacted by the Chief Executive Officer of Customs, who is mandated under section 269F of the Act to consider and decide on tariff concession applications. The primary policy objective of this instrument is to ensure that goods, in this case certain hot drink makers, are accessible at a lower cost, thereby promoting trade and consumption of these goods in Australia. By providing a tariff concession, the instrument directly aligns with the Act's aim to streamline customs processes and support economic efficiency.
Scope and Application
The Customs Act 1901, specifically under Part XVA, authorises the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to certain goods. This scheme allows for applications to be made by any person seeking a concession on goods, provided that the goods do not fall within the categories excluded by section 269SJ of the Act. The CEO must consider whether the application meets the core criteria, notably that no substitutable goods are being produced in Australia in the ordinary course of business at the time of application. If these criteria are met, a TCO is issued which declares that the goods in question are subject to a specific item in Schedule 4 of the Customs Tariff Act 1995, with the duty rate specified therein. The TCO instrument in question, No. 0946753, concerns certain hot drink makers and was issued after Sunbeam Corporation Ltd's application on 2 December 2009, and came into force on that date. The TCO does not disadvantage any person or impose new liabilities, and importers may apply for duty refunds on imports of the affected goods from the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0946753 under the Customs Act 1901 (section 269F) allow for the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. When an applicant, such as Sunbeam Corporation Ltd, submits an application for a TCO in respect of certain goods, the CEO evaluates the application to determine whether it meets the core criteria set out in section 269C of the Act. If the CEO is satisfied that the application meets the core criteria, they must make a written TCO order (section 269P(3)). The instrument in question, TCO No. 0946753, applies to certain hot drink makers and declares that they are subject to a specific item in Schedule 4 of the Customs Tariff Act 1995, resulting in a reduced rate of customs duty from 5% to free.
The Act imposes specific obligations on both the applicant and the CEO. The applicant must submit a valid application to the CEO for a TCO (section 269F), ensuring it is not in respect of goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The CEO must then assess whether the application meets the core criteria, which require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the application meets these criteria, the CEO is obligated to make a TCO (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who considers the TCO should not be made (subsection 269K(1)).
Under the Customs Act 1901, breaches or non-compliance with the requirements for TCOs can lead to various consequences. However, the specific offences, penalties, or civil/criminal consequences for breach are not detailed in the explanatory statement. The Act generally outlines the process and criteria for granting TCOs but does not specify the penalties for failing to comply with these provisions. The focus of the legislation is on facilitating the application process for tariff concessions and ensuring that the rights of applicants and the general public are protected. Any breach of the stipulated requirements would likely be subject to the general enforcement mechanisms available under the Customs Act 1901, which may include fines, penalties, or other legal actions as deemed appropriate by the relevant authorities.