EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1052162
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 Pty Ltd applied for a TCO in respect of certain coffee machine cleaning tablets on 26 November 2010.
Instrument
TCO No 1052162 was made on 28 February 2011. It declares that those certain coffee machine cleaning tablets 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. 1052162 is taken to have come into force on 26 November 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 enacted by the Parliament of Australia to provide for the regulation of customs and excise duties, among other things. This Act includes provisions under which Tariff Concession Orders (TCOs) can be made to lower the rate of customs duty on certain goods. The Customs Act 1901 was amended to introduce this scheme in response to the need for a mechanism that could facilitate tariff concessions, thereby promoting trade and economic efficiency by reducing the cost of imported goods for consumers and businesses. The policy objective of these concessions is to encourage the import of goods that are not produced domestically, thereby supporting competition and potentially lowering prices for consumers. The Tariff Concession Instrument No. 1052162, made in 2011, is an example of how this scheme is applied in practice, with a TCO granted for certain coffee machine cleaning tablets, reducing their duty from 5% to free, provided no substitutable goods were produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 1052162 under the Customs Act 1901 applies specifically to goods that are the subject of a Tariff Concession Order (TCO). This legislation is invoked when an entity, such as Sunbeam Pty Ltd in this case, applies for a concession to reduce the customs duty on certain goods, in this instance, coffee machine cleaning tablets. The application process is governed by the Act, which mandates that the Chief Executive Officer of Customs (CEO) assesses whether the goods for which the concession is sought meet the core criteria. This involves determining if there are no substitutable goods produced in Australia on the date the application was lodged. If the CEO is satisfied that the application meets these criteria, a written order is issued, granting the concession. The application of this Act is jurisdictional, applying Commonwealth-wide, and affects entities involved in the importation of specified goods. However, it does not apply to goods listed in section 269SJ of the Act, which cannot be subject to a TCO. The TCO does not affect pre-existing rights or impose liabilities on any person for actions taken prior to its registration.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1052162 under the Customs Act 1901 require the Chief Executive Officer of Customs (CEO) to consider applications for Tariff Concession Orders (TCO) on specific goods. According to section 269F, a person can apply for a TCO if the goods are not those listed in section 269SJ, which are ineligible for tariff concessions. If the CEO is satisfied that no substitutable goods were produced in Australia at the time the application was lodged (section 269C), a TCO will be issued. The TCO then applies a lower or free rate of customs duty to the specified goods, as outlined in Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). For the specific case of the coffee machine cleaning tablets, item 50 of Schedule 4 applies, resulting in a duty-free status for these goods.
The obligations and requirements imposed by the Act on parties and entities include the submission of an application by the person interested in the goods, as per section 269F. The CEO must assess the application against the core criteria, ensuring that no substitutable goods are produced in Australia at the time of the application (section 269C). If the criteria are met, the CEO is mandated to make a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)), although no submissions were received for TCO No. 1052162. The TCO itself takes effect from the date the application was lodged (subsection 269S(1)), and it does not disadvantage any person by affecting their rights as of the registration date.
Any breaches of the provisions of the Customs Act 1901 can lead to civil or criminal consequences. While the explanatory statement does not detail specific offences under the Act in relation to TCO applications, breaches of customs laws generally can result in penalties. For example, section 281 of the Act provides for penalties for offences involving false statements or documents, with potential fines and imprisonment. The penalties for such offences can include substantial fines and/or imprisonment, depending on the severity of the breach. It is important to note that the explanatory statement does not provide specific maximum penalties for breaches related to TCO applications, but penalties for broader customs offences can be significant.