EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606142
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 car mats on 10 April 2006.
Instrument
TCO No 0606142 was made on 30 June 2006. It declares that those certain car mats 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 10%. 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. 0606142 is taken to have come into force on 10 April 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, enacted by the Australian Parliament, provides a legislative framework for the administration of customs and excise, including the ability for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) to lower customs duty rates on certain goods. The gap this legislation addresses is the need for a mechanism to reduce customs duty on goods that are not produced in Australia, thereby encouraging import and use of these goods. The Tariff Concession Instrument No. 0606142, issued on 30 June 2006, is an example of such an order, applied to specific car mats that benefit from a reduced duty rate from 10% to 0%. The policy objective here is to facilitate trade by making certain imported goods more competitively priced in the Australian market without imposing any liabilities on importers or disadvantaging any other parties.
Scope and Application
The Tariff Concession Instrument No. 0606142 applies to the concession of customs duty rates for certain car mats, as specified in the instrument, and is enacted under the Customs Act 1901. The Act applies to any person or entity seeking tariff concessions for goods that are not produced in Australia and for which no substitutable goods are produced domestically. This concession is available for specific goods such as car mats, provided that the application meets the core criteria outlined in section 269C of the Act. The Act operates on a national level, as it is a Commonwealth legislation, and its reach extends to all entities involved in the importation of goods subject to tariff concession orders. The Act does not apply to goods specified in section 269SJ, which are ineligible for tariff concessions. The application and scope of this legislation may be further extended or clarified through subordinate instruments, such as regulations that detail specific processes or additional criteria for applications.
Key Provisions
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0606142, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). The Act, specifically under section 269F, allows for the application of a lower rate of customs duty on goods that are subject to a TCO. Section 269C of the Act stipulates that a TCO application meets the core criteria if, on the day of the application, no substitutable goods were produced in Australia in the ordinary course of business. Furthermore, section 269B defines terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. If the CEO is satisfied that the application meets these criteria, a written TCO is issued, as per section 269P(3).
Entities and individuals must adhere to the provisions of the Act when applying for a TCO. For instance, applicants must ensure that no substitutable goods are being produced in Australia, as per section 269C. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. This publication is mandatory as soon as practicable after accepting a TCO application as valid. Importers also have the right to apply for a refund of duty on goods imported since the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations.
Breach of the provisions outlined in the Customs Act 1901 may lead to civil or criminal consequences. Although specific offences and penalties are not detailed in the explanatory statement, general provisions within the Act would apply. For example, section 187 of the Customs Act 1901 provides for penalties for providing false or misleading information in the context of customs duties, which can include fines and imprisonment. The Act also allows for the recovery of any overpaid duty if it is found that the TCO was obtained fraudulently or through misrepresentation. The consequences for non-compliance can be significant, potentially including financial penalties and legal action against the offending party.