EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1023396
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.
Outlook Australia Pty Ltd applied for a TCO in respect of certain childrens toilets on 25 May 2010.
Instrument
TCO No 1023396 was made on 17 August 2010. It declares that those certain childrens 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. 1023396 is taken to have come into force on 25 May 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, as amended by Tariff Concession Instrument No. 1023396 enacted in 2010, aims to provide tariff concessions for specific goods to encourage their importation and use in Australia. The Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce the rate of customs duty on certain goods if they meet the criteria outlined in the Act, such as the absence of substitutable goods produced in Australia. This instrument was introduced to address the need for reducing duties on specific imports to enhance their availability and affordability within the Australian market, thereby supporting economic activities and consumer benefits. The policy objective is to facilitate the importation of these goods by lowering their customs duty, thereby ensuring that such products are accessible and competitively priced.
The Tariff Concession Instrument No. 1023396 was made by the Chief Executive Officer of Customs following an application by Outlook Australia Pty Ltd for tariff concessions on certain children's toilets. The instrument was published in the Gazette, inviting submissions from interested parties, none of which were received. Consequently, the instrument came into effect on the date of application, 25 May 2010. This measure ensures that importers of these goods can apply for duty refunds, enhancing their financial viability while not imposing new liabilities on any party except the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 1023396, made under the Customs Act 1901, applies to the specific case of children’s toilets and is designed to provide a lower rate of customs duty for these goods. The instrument targets importers who bring these goods into Australia by granting them tariff concessions, effectively reducing the duty rate from the general 5% to free of charge, contingent upon the criteria set forth in the Act. The instrument’s jurisdiction spans the entire Commonwealth of Australia, as it is made under federal legislation. It is important to note that this concession does not extend to goods specified in section 269SJ of the Act, which includes those that are already being produced in Australia or those for which substitutable goods are available domestically. The application of this Tariff Concession Order is automatically effective from the date the application was lodged, in this case, 25 May 2010, and it does not impose any liabilities on individuals or entities other than the Commonwealth. Importers can further benefit from this concession by applying for refunds of any duties paid on these goods since the effective date of the order.
Key Provisions
The Tariff Concession Instrument No. 1023396 under the Customs Act 1901 is focused on providing tariff concessions for specific goods, namely children's toilets. According to section 269F, an application for a Tariff Concession Order (TCO) can be made to the Chief Executive Officer of Customs (CEO), who must then assess the application against the criteria set out in section 269C. If the CEO determines that no substitutable goods were produced in Australia on the day the application was lodged, a TCO can be issued (section 269P(3)). This order declares that the specified goods are subject to a lower rate of duty, in this case, a rate of free duty as opposed to the general rate of 5% (Schedule 4, item 50 of the Customs Tariff Act 1995).
The obligations under this Act require the CEO to consider the application against the stipulated criteria and ensure that no substitutable goods were produced in Australia. If these conditions are met, the CEO must issue a written TCO. Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit any reasons against the TCO being made. Although in this instance, no submissions were received, this process ensures transparency and fairness in the decision-making process.
Failing to adhere to the provisions of the Customs Act 1901 can result in legal consequences. While the explanatory statement does not specify particular offences or penalties related to the TCO process, it is important to note that any non-compliance with the Customs Act could lead to enforcement actions by the Australian Customs and Border Protection Service. Such actions may include fines, penalties, or other legal measures as outlined in the Act and related regulations. The severity of these consequences would depend on the nature and extent of the breach, but they underscore the importance of complying with the legislative requirements.