EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1108786
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.
Boston Body Technology Pty Ltd applied for a TCO in respect of certain toilet access seats on 10 March 2011.
Instrument
TCO No 1108786 was made on 30 May 2011. It declares that those certain toilet access seats 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. 1108786 is taken to have come into force on 10 March 2011.
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, provides a framework for the regulation of customs and excise duties, and includes provisions for Tariff Concession Orders (TCOs). These orders allow for a lower rate of customs duty on specified goods, provided certain criteria are met. The Tariff Concession Instrument No. 1108786, made on 30 May 2011, was introduced to address an application by Boston Body Technology Pty Ltd for a tariff concession on certain toilet access seats. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thus satisfying the core criteria for a TCO. This resulted in the application of a 5% general rate of duty being replaced with a free rate for the specified goods. The process involved publishing a notice in the Gazette to invite submissions, none of which were received, thereby allowing the TCO to proceed. The policy objective is to ensure that tariff concessions are granted fairly and in accordance with the legislative requirements, while potentially benefiting importers by reducing their duty liabilities.
Scope and Application
The Tariff Concession Instrument No. 1108786, made under the Customs Act 1901, applies specifically to certain toilet access seats, and its purpose is to provide tariff concessions that result in a reduced rate of customs duty for these goods. The instrument targets individuals or entities involved in the importation of these seats, effectively lowering the general rate of duty from 5% to free, provided that the application for the concession meets the criteria stipulated in the Act. The legislation's jurisdiction is Commonwealth-wide, extending across Australia, and it does not specify any exclusions or exemptions apart from those goods outlined in section 269SJ of the Act that are ineligible for tariff concessions. The instrument was made after Boston Body Technology Pty Ltd applied for the concession on 10 March 2011, and it was registered on 30 May 2011 following satisfaction by the Chief Executive Officer of Customs that the application met the core criteria. The application process also involved publishing a notice in the Gazette to allow for any objections, none of which were received. The commencement date for the tariff concession is considered to be the day the application was lodged, meaning that it applies retroactively from 10 March 2011, without affecting the rights of any person other than the Commonwealth in relation to actions taken before the registration date.
Key Provisions
The main operative sections of this legislation, Tariff Concession Instrument No. 1108786, are sections 269C, 269P(3) and 269S(1) of the Customs Act 1901. Section 269C stipulates that an application for a Tariff Concession Order (TCO) will meet the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) requires the Chief Executive Officer (CEO) of Customs to make a written order (the TCO) if satisfied that the application meets the core criteria. Finally, section 269S(1) provides that a TCO is taken to have come into force on the day on which the application for the TCO was lodged. In this case, the TCO for certain toilet access seats was made on 30 May 2011, and it is taken to have come into force on 10 March 2011.
The Customs Act 1901 imposes obligations on applicants for TCOs, the CEO of Customs, and importers of the affected goods. The applicant must ensure that the application meets the core criteria by demonstrating that no substitutable goods were produced in Australia on the day the application was lodged. The CEO must decide whether the application meets the core criteria and, if so, make a TCO. Importers of the goods subject to the TCO can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.
Failure to comply with the provisions of the Customs Act 1901 may result in civil or criminal penalties. Section 269ZC of the Act provides that a person who contravenes a TCO or who knowingly makes a false statement in an application for a TCO commits an offence and is liable to a penalty of 100 penalty units for an individual and 500 penalty units for a body corporate. Additionally, section 275 of the Act provides that a person who knowingly makes a false statement or representation in relation to a matter under the Act commits an offence and is liable to a penalty of 10,000 penalty units for an individual and 50,000 penalty units for a body corporate.
In conclusion, the Tariff Concession Instrument No. 1108786 provides a lower rate of customs duty for certain toilet access seats, subject to the applicant meeting the core criteria set out in section 269C of the Customs Act 1901 and the CEO making a TCO in accordance with section 269P(3). The TCO is taken to have come into force on the day on which the application was lodged. The Act imposes obligations on applicants, the CEO, and importers, and failure to comply with the Act may result in civil or criminal penalties.