EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1115023
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.
Asko Appliances (Aust) Pty Ltd applied for a TCO in respect of certain soup makers on 12 May 2011.
Instrument
TCO No 1115023 was made on 01 August 2011. It declares that those certain soup makers 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. 1115023 is taken to have come into force on 12 May 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 Commonwealth Parliament, provides a framework for the regulation of customs duties in Australia. The 2011 Explanatory Statement for Tariff Concession Instrument No. 1115023 further elaborates on the legislative process for tariff concessions, specifically addressing the issue of providing tariff relief for certain imported goods. This instrument was introduced to address the need for reduced customs duty on specific goods that are not produced domestically, thereby encouraging imports and potentially benefiting consumers through lower prices. The policy objective is to ensure that tariff concessions are granted in a manner that aligns with the broader economic policy of promoting fair trade practices and economic efficiency by allowing for the importation of goods that are not domestically produced. The instrument details the process by which tariff concession orders are made and the conditions under which they can be applied, ensuring transparency and fairness in the application process.
Scope and Application
The Tariff Concession Instrument No. 1115023 under the Customs Act 1901 applies to the specific goods for which a Tariff Concession Order (TCO) has been granted, in this case, certain soup makers. The Act applies to any person or entity seeking a concession on customs duty for goods not produced in Australia, ensuring no substitutable goods are produced domestically. The geographic reach of this legislation is national, as it is governed under the Commonwealth of Australia. The TCO is effective from the date the application was lodged, which in this instance was 12 May 2011, and applies to any imports of the specified goods thereafter. The Act explicitly excludes certain goods as outlined in section 269SJ from being subject to a TCO. The CEO’s decision to grant the concession is contingent on satisfying the core criteria, primarily that no substitutable goods are produced in Australia. The TCO does not disadvantage any existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1115023 under the Customs Act 1901 (section 269P(3)) specify that the Chief Executive Officer of Customs (CEO) must make a written order declaring certain soup makers to be goods that are subject to a particular rate of customs duty. This rate is specified in Schedule 4 to the Customs Tariff Act 1995, where these goods are assigned a duty rate of free, differing from the general rate of 5% for similar goods not covered by a Tariff Concession Order (TCO). Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions on the TCO application, although in this case, no submissions were received. Section 269S(1) states that the TCO is deemed to have come into force on the date the application was lodged, which in this instance is 12 May 2011.
The Act imposes several obligations and requirements on the parties involved. The CEO of Customs must ensure that the application for a TCO meets the core criteria outlined in section 269C. This includes confirming that no substitutable goods were produced in Australia on the date of the application, as defined in section 269D. The CEO must also publish a notice in the Gazette, inviting any interested parties to submit their views on whether the TCO should be granted (subsection 269K(1)). Additionally, section 269S(1) stipulates that the TCO is effective from the date the application was lodged. The rights of importers are positively affected, as they can apply for a refund of duty on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations.
There are no specific offences outlined in the explanatory statement for breaching the provisions of this TCO. However, any breach of the Customs Act 1901 or associated regulations could result in civil or criminal penalties. Under the Customs Act, penalties for non-compliance can include fines and imprisonment. The maximum penalty for serious breaches can be substantial, typically aligning with the severity of the offence and the extent of the contravention. The Act also allows for the imposition of pecuniary penalties, which can be significant, depending on the nature and circumstances of the breach. Additionally, any misrepresentation or fraud in connection with a TCO application could lead to more severe penalties, including fines and imprisonment as prescribed under the relevant sections of the Customs Act.