EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513980
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.
Interclean Australasia Pty Ltd applied for a TCO in respect of certain T-Bar sleeves on 23 December 2005.
Instrument
TCO No 0513980 was made on 24 March 2005. It declares that those certain T-Bar sleeves 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. 0513980 is taken to have come into force on 23 December 2005.
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 Tariff Concession Instrument No. 0513980, made under the Customs Act 1901, addresses the problem of ensuring that certain goods eligible for tariff concessions are not subject to Australian production, thus maintaining competitive advantage for foreign producers. Enacted by the Chief Executive Officer of Customs, the instrument aims to provide relief on customs duties for specific imported goods that are not produced domestically, aligning with the broader policy objective of facilitating international trade by reducing import costs. This initiative, effective from the date of application, allows for a streamlined process of tariff concessions, ensuring that no pre-existing rights or liabilities of individuals or entities are adversely affected.
Scope and Application
The Tariff Concession Instrument No. 0513980 applies to specific T-Bar sleeves as designated by the Chief Executive Officer of Customs under the Customs Act 1901. This Act allows for the reduction or waiver of customs duty on certain goods through Tariff Concession Orders (TCOs), provided that no substitutable goods are produced in Australia. The geographic reach of this legislation is national, as it falls under the Commonwealth's purview. The application for a TCO, such as the one made by Interclean Australasia Pty Ltd, must meet the core criteria set out in the Act, specifically ensuring that no substitutable goods are produced domestically. The TCO grants a tariff concession to these specific goods, reducing the general duty rate of 5% to free, effective from the date the application was lodged, 23 December 2005. The legislation does not disadvantage any person and does not impose new liabilities, only benefiting the rights of importers who may apply for duty refunds on goods imported after the effective date of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0513980, under the Customs Act 1901, primarily operates through Section 269F, which allows for applications to the Chief Executive Officer of Customs (CEO) for Tariff Concession Orders (TCOs). If an application is made for goods not listed in Section 269SJ, the CEO must determine if the application meets the core criteria stipulated in Section 269C. This determination hinges on whether substitutable goods were produced in Australia at the time the application was lodged, as defined by Sections 269D and 269E. If the application satisfies these conditions, the CEO is obligated under Section 269P(3) to issue a TCO, effectively reducing the customs duty on the specified goods. For instance, in the case of T-Bar sleeves, the duty was reduced from 5% to free under this TCO.
The obligations imposed by the Customs Act on the CEO and applicants are significant. The CEO must ensure that any TCO application that meets the core criteria is processed in a timely manner, which includes publishing a notice in the Gazette inviting any interested parties to submit objections. This was done for Instrument TCO No. 0513980, but no objections were received. Furthermore, the Act mandates that the TCO should not disadvantage any person other than the Commonwealth and should not impose new liabilities on them, as per Section 269S(1). This means that the rights and obligations of individuals and entities existing prior to the TCO are preserved.
Breaches of the requirements set out in the Customs Act and the associated regulations can lead to various consequences. While the explanatory statement does not detail specific offences, it is implied that non-compliance with the Act could result in legal action. Under Australian law, penalties for breaches can include fines and imprisonment, depending on the severity and intent of the breach. The maximum penalties would be determined by the specific nature of the offence and relevant legislative provisions, but they can be significant for both individuals and corporations. For instance, knowingly providing false information in an application could lead to criminal charges under relevant sections of the Customs Act, while failure to comply with the terms of a TCO could result in financial penalties or other civil consequences.