EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0950006
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 23 December 2009.
Instrument
TCO No 0950006 was made on 12 March 2010. 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. 0950006 is taken to have come into force on 23 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. 0950006 was enacted in 2010 under the Customs Act 1901 to provide tariff concessions for specific goods, thereby addressing a need for lower customs duty rates for certain imported items that were not being produced domestically. The Customs Act 1901 established the framework under which Tariff Concession Orders (TCOs) could be issued by the Chief Executive Officer of Customs, allowing for reduced customs duty on goods specified in a TCO. This mechanism aims to support the import of goods where there is no domestic production, thereby encouraging trade and potentially benefiting consumers by making such goods more affordable. The policy objective is to ensure that the application of a TCO is fair and does not disadvantage any party, as outlined in the explanatory statement. The instrument was introduced without any submissions against it, indicating broad acceptance of its provisions.
Scope and Application
The Tariff Concession Instrument No. 0950006, issued under the Customs Act 1901, applies to goods specifically targeted for tariff concessions, in this case certain marine toilets. This legislation is pertinent to entities involved in the importation and production of these goods, with the primary focus on facilitating trade by reducing customs duty rates. The act applies to any entity or individual importing the specified marine toilets, thereby directly impacting the import duties they are liable for. The scope of the Act is national, operating within the framework of Australian customs legislation. The instrument does not extend to goods that are specified in section 269SJ of the Act as ineligible for tariff concessions, which typically include goods that have substitutable counterparts produced within Australia. The application of this Act can be further extended or restricted through subordinate instruments, which may specify additional details or conditions for the tariff concessions. This particular concession, effective from 23 December 2009, reduces the duty on the specified marine toilets from the general rate of 5% to free, thus providing a financial benefit to importers who have already paid the duty before the concession was applied.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0950006 (section 269P(3)) declare that certain marine toilets are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, with the rate of duty being free instead of the general rate of 5%. This effectively means that importers of these specific marine toilets will not incur any customs duty upon their import, provided the TCO criteria are met. The instrument also specifies that the TCO is taken to have come into force on the day the application was lodged (section 269S(1)).
The Act imposes several obligations and requirements on the parties involved. For instance, section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). The CEO must then determine if the application meets the core criteria set out in section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the application is deemed valid, the CEO must make a written order (section 269P(3)). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on whether the TCO should be made.
Failure to comply with the requirements set out in the Customs Act 1901 may result in various consequences. While the explanatory statement does not explicitly detail offences or penalties for breaching the TCO provisions, breaches of other sections in the Customs Act can lead to civil or criminal penalties. For example, knowingly making a false statement in a customs document can result in a fine of up to $22,200 or imprisonment for up to two years, or both (subsection 236(1)). Furthermore, failure to comply with the terms of a TCO could potentially lead to the imposition of customs duty or other penalties as stipulated under the Customs Act.
Under the Customs Act, the CEO must ensure that the application for a TCO meets the core criteria, which involves verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This verification is crucial to determine the eligibility of the goods for a reduced tariff rate. Additionally, the CEO is required to publish a notice in the Gazette, inviting submissions from interested parties, and must consider these submissions before making a decision on the TCO. The rights of importers are also protected under this instrument, allowing them to apply for a refund of duty on goods imported since the TCO came into force.