EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610527
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.
Smith and Nephew (Aust) Pty Ltd applied for a TCO in respect of certain wadding on 19 June 2006.
Instrument
TCO No 0610527 was made on 8 September 2006. It declares that those certain wadding 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. 0610527 is taken to have come into force on 19 June 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. 0610527 was enacted in 2006 under the Customs Act 1901, aiming to address the issue of tariff concessions for specific imported goods that do not have Australian-made alternatives. This legislation was introduced to streamline the process for granting tariff concessions, thereby encouraging imports of goods that cannot be produced domestically. The instrument was issued by the Chief Executive Officer of Customs, following an application by Smith and Nephew (Aust) Pty Ltd for tariff concessions on certain wadding. The instrument specifies that these goods are subject to a zero percent duty rate, as opposed to the general rate of five percent. The process involved publishing a notice in the Gazette to invite objections to the concession, though none were received. The tariff concession order came into force on the date the application was lodged, ensuring that importers could benefit from the reduced duty rates without incurring any liabilities for past transactions.
Scope and Application
The Customs Act 1901, as applied through Tariff Concession Instrument No. 0610527, applies to individuals and entities seeking tariff concessions for specific goods imported into Australia. This legislation allows for the application of lower customs duty rates on goods that are subject to a Tariff Concession Order (TCO). The Act is concerned with the process through which these concessions are sought and granted by the Chief Executive Officer of Customs (CEO) and pertains to goods that are not produced in Australia in the ordinary course of business, as outlined in the Act. The instrument is applicable on a national level across Australia, governed under the Commonwealth. The TCO does not extend to goods specified in section 269SJ of the Act, which details the goods that are ineligible for tariff concessions. The Act may be further refined or extended through subordinate instruments or regulations, although the specific TCO No. 0610527 applies directly as set out in the instrument.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0610527 under the Customs Act 1901 (the Act) include section 269F, which allows for the application for a Tariff Concession Order (TCO) by a person to the Chief Executive Officer (CEO) of Customs. Section 269C specifies the core criteria for a TCO, namely that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, section 269P(3) mandates that the CEO must make a written order declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995, with a lower rate of customs duty.
The Act imposes obligations on the CEO to consider applications for TCOs and ensure that the core criteria are satisfied. The CEO must publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any interested parties regarding the application. Additionally, section 269S(1) stipulates that the TCO comes into effect on the day the application is lodged, in this case, 19 June 2006. The CEO’s decisions must be based on the application of the relevant sections of the Act, ensuring the criteria are met and the proper procedures are followed.
Failure to comply with the requirements of the Customs Act 1901 or the Tariff Concession Instrument can lead to various consequences. For instance, if an entity or individual fails to meet the criteria for a TCO or submits an application for goods that are explicitly excluded under section 269SJ, this could be seen as non-compliance with the Act. While specific offences and penalties are not detailed in this instrument, breaches of the Customs Act can generally result in both civil and criminal penalties. Civil penalties may include fines, while criminal penalties can range from fines to imprisonment, depending on the severity of the breach. The maximum penalties would be aligned with the provisions of the Customs Act 1901, which can include substantial fines and/or imprisonment terms for serious breaches.