EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516787
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.
NSW Leather Company Pty Ltd applied for a TCO in respect of certain ovine leather on 09 December 2005.
Instrument
TCO No 0516787 was made on 03 March 2006. It declares that those certain ovine leathers 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. 0516787 is taken to have come into force on 09 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. 0516787, enacted in 2006, addresses the need to provide tariff concessions for specific goods under the Customs Act 1901. This legislation enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that result in lower customs duties for eligible goods. The problem this legislation was introduced to address was the potential for certain imported goods to receive tariff benefits if no substitutable domestic products were being produced in Australia. The policy objective is to encourage the importation of goods where there is no local production, thereby benefiting importers and potentially enhancing consumer choice and market competition.
The instrument was developed following an application by NSW Leather Company Pty Ltd for tariff concessions on certain ovine leathers, with the CEO of Customs determining that the application met the core criteria under section 269C of the Act. As a result, the CEO issued TCO No. 0516787, which applies a duty rate of free on the specified ovine leathers, down from the general rate of 5%. The instrument was published in the Gazette with an invitation for public submissions, none of which were received. The TCO came into effect on the date of the application, 09 December 2005, and does not affect any pre-existing rights or impose any new liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0516787, made under the Customs Act 1901, applies to the specific case of ovine leather imported into Australia, as presented by NSW Leather Company Pty Ltd. This legislation operates within the Commonwealth jurisdiction and applies to entities and individuals involved in the importation of the specified ovine leather goods. The primary focus of this Act is to provide a lower rate of customs duty for certain goods, subject to the conditions outlined in the Act. This concession is granted when the Chief Executive Officer of Customs is satisfied that no substitutable goods are produced in Australia in the ordinary course of business. The exemption from customs duty under this Instrument is limited to the ovine leather specified in the application and does not extend to other goods unless similarly applied for and approved. The Act ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO was taken to have come into force. However, it explicitly states that the rights of any person, other than the Commonwealth, as at the date of registration will not be disadvantaged or impose liabilities in respect of anything done or omitted before the registration date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, provides the framework for Tariff Concession Orders (TCOs) that the Chief Executive Officer of Customs (CEO) may issue. Section 269F allows for applications for a TCO, and if the CEO determines that the application is not for goods specified in section 269SJ, they must assess whether the application meets the core criteria outlined in section 269C. This involves confirming that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of these terms are further elaborated in sections 269D, 269E, and 269F, ensuring clarity on what constitutes 'goods produced in Australia,' 'ordinary course of business,' and'substitutable goods.'
The obligations under this Act primarily rest on the CEO to review TCO applications and decide based on the outlined criteria. Section 269P(3) mandates that if the CEO finds the application meets the core criteria, they must issue a written order specifying that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. For NSW Leather Company Pty Ltd, this meant that the CEO issued TCO No. 0516787, declaring that certain ovine leathers are subject to a free rate of duty instead of the general 5% duty.
Failure to comply with the provisions of the Customs Act 1901 and the regulations associated with TCOs can lead to significant consequences. While the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences, it is known that breaches of customs laws can lead to penalties under the Customs Act, which may include fines and imprisonment. The exact penalties would depend on the nature and severity of the breach, and the specific provisions of the Act and associated regulations would need to be consulted for precise details.