EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606017
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.
Super Cheap Auto Pty Ltd applied for a TCO in respect of certain gazebos on 29 March 2006.
Instrument
TCO No 0606017 was made on 16 June 2006. It declares that those certain gazebos 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. 0606017 is taken to have come into force on 29 March 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 Customs Act 1901 was enacted by the Parliament of Australia to provide a comprehensive framework for the administration of customs and excise duties. This Act includes provisions for the establishment of Tariff Concession Orders (TCOs) under section 269F, which allow for reduced rates of customs duty on specified goods. Tariff Concession Instrument No. 0606017 was introduced to address the specific need of providing tariff concessions for certain gazebos, as applied for by Super Cheap Auto Pty Ltd on 29 March 2006. The instrument was enacted on 16 June 2006, and it was made effective from 29 March 2006, the date the application was lodged. The policy objective, as stated in the Act, is to ensure that a TCO application meets the core criteria, particularly that no substitutable goods were produced in Australia in the ordinary course of business, thereby facilitating the reduction of customs duty to zero percent for the specified gazebos.
Scope and Application
The Tariff Concession Instrument No. 0606017, which amends the Customs Act 1901, applies to the entity Super Cheap Auto Pty Ltd in relation to their application for tariff concessions on certain gazebos. This instrument is concerned with the application of a lower rate of customs duty to goods specified within a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. This concession applies to the specific gazebos for which Super Cheap Auto Pty Ltd applied, and the application process was initiated on 29 March 2006. The order, which came into force on the same day, declares that the gazebos are subject to a 0% duty rate, down from the general rate of 5%. The instrument extends to the entire Commonwealth of Australia, as per the jurisdictional reach of the Customs Act 1901, and it does not impose any liabilities or affect the rights of persons other than the Commonwealth. This particular TCO does not extend its application through subordinate instruments but operates as a standalone declaration under the Customs Act 1901.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0606017, which pertains to the Customs Act 1901, include section 269C (3), which stipulates that a Tariff Concession Order (TCO) application must meet core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the criteria, a written order must be made declaring that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995. In this instance, the TCO declares that the certain gazebos are subject to item 50 of Schedule 4, with a reduced rate of duty from 5% to 0%.
The Act imposes several obligations and requirements on the parties involved. The CEO is responsible for assessing TCO applications to determine if they meet the core criteria (section 269C). If an application is deemed valid, the CEO must publish a notice in the Gazette inviting any person who considers the TCO should not be made to lodge a submission (section 269K(1)). Once the CEO has made a TCO, it comes into force on the date the application was lodged (section 269S(1)). The Act also ensures that the TCO does not affect the rights of any person as at the date of registration, thereby preventing any disadvantage to or imposition of liabilities on any person (section 269S(3)).
In terms of potential breaches, the Customs Act 1901 does not explicitly outline specific offences or penalties related to the TCO process itself. However, any failure to comply with the Act’s provisions or misuse of TCOs could potentially lead to general penalties under the Customs Act, which might include fines and imprisonment. Additionally, any fraudulent claims for tariff concessions or incorrect declarations could lead to civil or criminal consequences under other relevant Australian legislation, such as the Crimes Act 1914. The exact penalties for such actions would depend on the nature and severity of the breach.