EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604028
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.
Sea to Summit Pty Ltd applied for a TCO in respect of certain moisture protection sacks on 17 February 2006.
Instrument
TCO No 0604028 was made on 28 April 2006. It declares that those certain moisture protection sacks 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 0%.
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. 0604028 is taken to have come into force on 17 February 2006.
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. 0604028 was enacted in 2006 under the Customs Act 1901, addressing the need for a streamlined process to grant tariff concessions for specific goods that are not produced in Australia. This instrument empowers the Chief Executive Officer of Customs to provide relief in the form of reduced customs duties for certain imported goods, provided they meet the specified criteria, such as the absence of substitutable goods produced domestically. The primary objective of this legislation is to support industries by making essential imported goods more affordable, thereby promoting economic growth and competitiveness without imposing undue burdens on existing businesses or individuals.
The instrument was introduced by the Parliament of Australia, with the intention of facilitating the import of goods that are crucial for various sectors but not manufactured locally, thus ensuring that businesses can access necessary materials at reduced costs. The process involves an application by interested parties, followed by a review to ensure compliance with the stipulated conditions, and finally, the issuance of a Tariff Concession Order if the criteria are met. This legislative measure aims to balance the interests of importers and the broader economy by providing tariff relief where appropriate, without negatively impacting existing rights or imposing new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0604028, made under the Customs Act 1901, applies to the specific goods identified in the instrument—certain moisture protection sacks—and to Sea to Summit Pty Ltd as the applicant for the tariff concession. This Act governs the process by which tariff concessions can be applied for and granted for goods that meet specific criteria, with the aim of potentially reducing customs duty rates on these goods. The application of the Act is limited to those goods specified in the Instrument, and it does not apply to goods that are listed in section 269SJ of the Customs Act, which cannot be subject to a tariff concession order. The Act applies on a Commonwealth level, with the Chief Executive Officer of Customs being the authority responsible for assessing and granting the tariff concession. The Act does not specify exclusions or exemptions beyond those already noted, and it extends its application through the subordinate instrument, TCO No. 0604028, which details the specific goods and the reduced duty rate applicable to them.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0604028 pertain to the conditions under which a Tariff Concession Order (TCO) can be made (section 269F), the core criteria that must be met (section 269C), and the definitions of terms such as 'goods produced in Australia' (section 269D), 'ordinary course of business' (section 269E), and 'substitutable goods' (section 269D). Section 269P(3) specifies that if the Chief Executive Officer (CEO) of Customs is satisfied that a TCO application meets the core criteria, they must issue a written order declaring that the goods are subject to a lower rate of customs duty as specified in the Customs Tariff Act 1995. The CEO must also publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made (section 269K(1)).
The obligations imposed on the parties governed by this legislation include the requirement for applicants to ensure their goods meet the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business (section 269C). The CEO must review the application, consult if necessary, and issue a TCO if the criteria are met. The CEO is also mandated to publish a notice in the Gazette inviting any interested parties to make submissions against the TCO application (section 269K(1)). Importers must comply with the terms of the TCO and can apply for duty refunds under the Customs Act 1901 (section 126(1)(r)).
Breach of the conditions specified in the Tariff Concession Instrument could lead to civil or criminal consequences, depending on the nature and severity of the breach. While the explanatory statement does not explicitly detail the penalties, breaches of the Customs Act 1901 can typically result in significant fines and, in severe cases, imprisonment. The maximum penalties for breaches of the Customs Act can vary widely, with offences involving fraudulent activities potentially carrying penalties of up to $220,000 or imprisonment for up to 10 years, or both, under section 226 of the Customs Act. Similarly, breaches involving the production of false documents or misleading statements can attract penalties under section 227 of the Act, which can also include substantial fines and imprisonment.