EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1012351
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 Dorf applied for a TCO in respect of certain kitchen and or sink accessories on 11 March 2010.
Instrument
TCO No 1012351 was made on 28 May 2010. It declares that those certain kitchen and or sink accessories 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. 1012351 is taken to have come into force on 11 March 2010.
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 Australian Parliament, establishes a framework for the regulation of customs and excise within Australia. One of its provisions, specifically Part XVA, enables the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs), which provide reduced customs duty rates for certain goods. The instrument F2010L02376, known as Tariff Concession Instrument No. 1012351, was introduced to address the need for tariff reductions on specific goods not produced domestically, thereby promoting import efficiency and consumer affordability. The CEO, satisfied that no substitutable goods were produced in Australia for the items in question, issued this order to provide a zero-duty rate for certain kitchen and sink accessories, effective from the date of the application, 11 March 2010. The policy objective is to facilitate the import of these goods without imposing additional costs or disadvantages to importers.
Scope and Application
The Tariff Concession Instrument No. 1012351 under the Customs Act 1901 applies to goods specified in the instrument, namely certain kitchen and sink accessories, and it is directed at the Chief Executive Officer of Customs, who has the authority to make Tariff Concession Orders (TCOs). This legislation provides a mechanism for reducing the rate of customs duty on particular imported goods, provided that no substitutable goods are produced in Australia. The application process for a TCO requires an applicant to demonstrate that the goods in question meet the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business. In this instance, Caroma Dorf successfully applied for a TCO on 11 March 2010, which was subsequently approved by the CEO on 28 May 2010, resulting in a tariff concession for the specified kitchen and sink accessories. The TCO is effective from the date of application, 11 March 2010, and does not retroactively affect any rights or impose any liabilities on parties other than the Commonwealth.
Key Provisions
The main operative sections of this legislation pertain to the process of applying for and granting Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. Section 269C stipulates that the CEO must determine whether the application meets the core criteria, specifically if no substitutable goods were produced in Australia on the day the application was lodged (Section 269D). If the application meets these criteria, the CEO must make a written order declaring that the goods are subject to a prescribed rate of duty specified in Schedule 4 to the Customs Tariff Act 1995 (Section 269P(3)).
The Act imposes several obligations and requirements on the parties involved. The CEO must assess applications for TCOs and decide whether they meet the core criteria, which involves confirming that no substitutable goods are produced in Australia. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be made (Section 269K(1)). In the case of TCO No. 1012351, no submissions were received. Moreover, the Act mandates 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 before the TCO came into force (Section 269S(1)).
In terms of offences, penalties, and consequences for breach, the Customs Act 1901 does not explicitly outline specific penalties for failing to comply with the provisions regarding TCOs. However, any breach of the Customs Act, including non-compliance with TCOs, could potentially lead to legal action under the general provisions of the Act. For instance, penalties for offences under the Customs Act can include substantial fines and, in severe cases, imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as any relevant provisions of the Customs Act or associated regulations.
The Customs Tariff Act 1995 also plays a role in determining the rates of duty applicable to goods subject to a TCO. For example, in the case of TCO No. 1012351, the goods in question are subject to a duty rate of zero percent instead of the general rate of five percent. This reduction in duty benefits importers who can apply for a refund of duty on goods imported since the TCO came into force (Regulation 126(1)(r)). The legislation ensures that while the rights of importers are positively affected, no liabilities are imposed on any person beyond the Commonwealth.