EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514786
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.
Tyres4u applied for a TCO in respect of certain tubes on 24 October 2005.
Instrument
TCO No 0514786 was made on 23 January 2006. It declares that those certain tubes 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. 0514786 is taken to have come into force on 24 October 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the regulation of imports and exports, including provisions for tariff concession orders (TCOs). The Customs Act 1901 was introduced to address the need for streamlined processes in the regulation of customs duties on specific imported goods. Specifically, Instrument No. 0514786, made under the Customs Act 1901, provides for tariff concessions on certain tubes, thereby reducing the customs duty rate from the general 5% to a free rate, in response to an application by Tyres4u. This concession aims to facilitate trade by reducing the cost burden on importers of these goods. The process for granting such concessions involves an application to the Chief Executive Officer of Customs, who must determine that no substitutable goods are produced in Australia, and subsequently publish a notice in the Gazette to invite any objections. In this instance, no objections were received, and the tariff concession took effect from the date the application was lodged.
Scope and Application
The Customs Act 1901, under Part XVA, provides the framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply lower rates of customs duty to specified goods. This legislative provision is intended to benefit certain goods by granting them tariff concessions, provided that no substitutable goods are produced in Australia in the ordinary course of business at the time of the application. The Act applies to individuals or entities that wish to apply for tariff concessions for specific goods, with the key criterion being the absence of domestically produced substitutable goods. The geographic reach of the Act is national, as it is a Commonwealth Act, and it applies to all entities importing goods into Australia. The Act does not specify exclusions or exemptions beyond those goods listed in section 269SJ, which inherently cannot be subject to a TCO. The scope of the Act may be further defined or extended through subordinate instruments, which can specify additional criteria or details on the implementation of tariff concessions. In the specific case of TCO No. 0514786, the concession applies to certain tubes, with the duty rate dropping from 5% to free, effective from the date the application was lodged, 24 October 2005.
Key Provisions
The Tariff Concession Order (TCO) No. 0514786, made under section 269F of the Customs Act 1901, applies to certain tubes which Tyres4u applied for on 24 October 2005. Pursuant to subsection 269P(3), the Chief Executive Officer (CEO) of Customs must make a written order if satisfied that the application meets the core criteria. This involves ensuring that, on the date of application, no substitutable goods were produced in Australia (section 269C). In this instance, the CEO was satisfied and made the TCO, declaring that the tubes are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. Firstly, under section 269K(1), the CEO must publish a notice in the Gazette, inviting any person who may object to the TCO to lodge a submission. In this case, no submissions were received. Additionally, section 269S(1) dictates that the TCO comes into force on the day the application was lodged, which for TCO No. 0514786, was 24 October 2005. The TCO does not affect any rights of persons, other than the Commonwealth, as at the date of registration, and does not impose any liabilities on any person.
In terms of consequences, breach of the provisions in the Customs Act 1901 may result in various penalties. Although the explanatory statement does not specify the exact penalties, the Act generally provides for both civil and criminal penalties for breaches. Civil penalties can include fines, and in some cases, imprisonment for serious or repeated offences. The specific penalties would depend on the nature and severity of the breach, as well as any applicable regulations under the Customs Act 1901. The statement does clarify, however, that the TCO does not impose any liabilities on any person.