EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1013593
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.
Vidchem Pty Ltd applied for a TCO in respect of certain liquid foam pump dispensers on 18 March 2010.
Instrument
TCO No 1013593 was made on 04 June 2010. It declares that those certain liquid foam pump dispensers 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. 1013593 is taken to have come into force on 18 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 was amended to include Part XVA, which established the framework for Tariff Concession Orders (TCOs), to address the need for a mechanism that allows for reduced customs duty on specific goods under certain conditions. Enacted by the Australian Parliament, this part of the Act allows the Chief Executive Officer of Customs to make TCOs for goods not produced in Australia, thus providing relief to businesses that rely on importing such goods. The policy objective behind these concessions is to facilitate trade by reducing the cost of imported goods, thereby benefiting both businesses and consumers. The Tariff Concession Instrument No. 1013593, made on 04 June 2010, exemplifies this process by applying a TCO to certain liquid foam pump dispensers, reducing their duty from 5% to free, and was introduced after the CEO was satisfied that no substitutable goods were produced domestically.
Scope and Application
The Tariff Concession Instrument No. 1013593 applies to the specific category of liquid foam pump dispensers as designated by Vidchem Pty Ltd in their application, which was accepted under the Customs Act 1901. The Act mandates that a Tariff Concession Order (TCO) can be issued by the Chief Executive Officer of Customs (CEO) if the application meets the core criteria, which include the absence of substitutable goods produced in Australia at the time of application. This instrument primarily affects entities involved in the importation of these specific goods by granting them tariff concessions, thereby reducing the customs duty from the general rate of 5% to a rate of free. The geographic reach of this legislation is national, impacting all importers across Australia. While the Act allows for the issuance of TCOs, it excludes certain goods from eligibility as specified in section 269SJ of the Act, ensuring that only those goods which meet the criteria for substitutability and production status can benefit from tariff concessions. The instrument came into effect on 18 March 2010, the date the application was lodged, and does not impose any liabilities on any person, nor does it affect the rights of any person as at the date of registration, ensuring that it does not disadvantage or impose liabilities on any person other than the Commonwealth for actions taken prior to the registration date.
Key Provisions
The main operative sections of the Customs Act 1901 in relation to Tariff Concession Orders (TCOs) are sections 269C, 269B, 269D, 269E, 269F, 269P, 269K, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. The CEO must decide if the application meets the core criteria (section 269C), which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Definitions for key terms like 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269B, 269D, and 269E respectively. If the CEO is satisfied that the application meets the core criteria, they must make a written order (section 269P(3)) declaring that the goods are subject to a specified rate of duty under the Customs Tariff Act 1995.
The Customs Act imposes several obligations and requirements on the parties involved. Firstly, any person seeking a TCO must apply to the CEO and provide sufficient information to satisfy the core criteria. The CEO, in turn, has the obligation to assess the application and ensure that it complies with the provisions of the Act. This includes verifying that no substitutable goods were produced in Australia and publishing a notice in the Gazette to invite submissions from interested parties. Additionally, the CEO must make a written order if the application meets the criteria, as outlined in section 269P(3). Importers benefit from the TCO by being able to apply for a refund of duty on goods imported since the TCO came into force.
The Customs Act includes provisions for offences, penalties, and consequences for breaches. While the explanatory statement does not specify particular offences related to TCOs, general provisions of the Act apply. Non-compliance with the Act's requirements can result in civil or criminal penalties. Civil penalties can include fines, and in severe cases, criminal penalties may apply, potentially leading to imprisonment. The specific penalties would depend on the nature and severity of the breach, as determined by the relevant authorities under the Act.
In summary, the Customs Act 1901 provides a structured process for applying for and granting TCOs, ensuring that only eligible goods benefit from reduced customs duty rates. The obligations are clearly defined for applicants and the CEO, while the Act also includes mechanisms for potential penalties for non-compliance. The specific case of TCO No. 1013593 for certain liquid foam pump dispensers highlights the application of these provisions, with the TCO taking effect from the date of the application and allowing for duty refunds for importers.