EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516520
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.
Victor Sports Pty Ltd applied for a TCO in respect of foam underwrap on 23 November 2005.
Instrument
TCO No 0516520 was made on 13 February 2006. It declares that those certain foam underwrap 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. 0516520 is taken to have come into force on 23 November 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 was enacted by the Parliament of Australia to provide for the regulation of customs and excise duties and other import and export charges. This legislation was introduced to address the need for a comprehensive framework governing customs duties, import and export controls, and related administrative processes to ensure the efficient collection of duties and the protection of domestic industries. The Tariff Concession Instrument No. 0516520, issued in 2006, exemplifies the Act's objective to facilitate tariff concessions for specific goods, thereby supporting economic growth and trade by reducing the financial burden on businesses importing particular items. In this instance, the instrument provides a tariff concession for foam underwrap, reducing the customs duty from 5% to free, reflecting the policy objective of fostering competitive markets and supporting industries reliant on imported materials.
Scope and Application
The Tariff Concession Instrument No. 0516520, under the Customs Act 1901, applies to the specific goods identified as foam underwrap, as determined by the Chief Executive Officer of Customs (CEO). The Act allows for the application of lower rates of customs duty on certain goods if a Tariff Concession Order (TCO) is granted. The TCO is applicable to the foam underwrap specified in the instrument, and the application process is open to any person who meets the criteria set out in section 269C of the Act, provided the goods in question are not listed in section 269SJ, which excludes certain goods from eligibility for a TCO. The instrument has a national jurisdictional reach, as it pertains to the Commonwealth of Australia and its customs duties. There are no stated exclusions or exemptions in the TCO itself; however, the application process is subject to the conditions outlined in the Act. The commencement of the TCO is effective from the date the application was lodged, which in this case was 23 November 2005. The application of the TCO does not affect any existing rights or liabilities of persons other than the Commonwealth, nor does it impose any new liabilities.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0516520, are primarily found under Part XVA of the Customs Act 1901, which sets out the process for making Tariff Concession Orders (TCOs). Section 269F of the Act allows for applications to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. Section 269C specifies the core criteria that must be met for such an application to be valid, which includes ensuring that no substitutable goods are produced in Australia on the day the application was lodged. If these criteria are met, the CEO is required to issue a written TCO, as detailed in section 269P(3). The TCO in question, No. 0516520, was made on 13 February 2006, declaring that certain foam underwraps are subject to a lower rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by this legislation on parties or entities it governs include ensuring that applications for TCOs are made in compliance with the core criteria specified in section 269C. The CEO of Customs must rigorously assess applications to ensure that no substitutable goods are produced in Australia on the application date. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any person who believes there are reasons why the TCO should not be made to submit their views. In this case, no submissions were received, which likely facilitated the approval process.
The consequences of breaching the provisions of this legislation are not explicitly detailed within the explanatory statement. However, general principles under the Customs Act 1901 would apply, where violations of customs regulations could result in both civil and criminal penalties. Civil penalties may include financial fines, while criminal penalties could result in imprisonment, depending on the severity and intent of the breach. The maximum penalties would be determined by the specific breach and the relevant sections of the Customs Act 1901 and associated regulations.