EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610683
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.
Henchman Products applied for a TCO in respect of certain plastic tool cases on 21 June 2006.
Instrument
TCO No 0610683 was made on 08 September 2006. It declares that those certain plastic tool cases 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. 0610683 is taken to have come into force on 21 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 Customs Act 1901 was enacted by the Parliament of Australia to regulate the importation and exportation of goods, and to provide for related matters. One of its provisions allows for the creation of Tariff Concession Orders (TCOs) through which lower rates of customs duty can be applied to certain goods, provided specific criteria are met. The problem or gap this scheme aims to address is facilitating trade by reducing duty costs for goods that are not produced domestically and are not considered substitutable by local products. In response to an application by Henchman Products, Tariff Concession Instrument No. 0610683 was issued on 8 September 2006, declaring that certain plastic tool cases are subject to a zero percent duty rate, down from the general rate of 5 percent, effective from 21 June 2006. This legislative instrument was introduced without any submissions against it, highlighting the absence of objections from the public regarding the tariff concession for these goods.
Scope and Application
The Customs Act 1901 applies to all entities and persons involved in the importation of goods into Australia, encompassing a broad range of industries and transactions. Specifically, Part XVA of the Act facilitates the creation of Tariff Concession Orders (TCOs) which can apply to any goods that meet the criteria for concession, such as those not produced in Australia in the ordinary course of business. This provision extends to the entire Commonwealth of Australia, impacting all states and territories uniformly. While the Act provides for the possibility of concession, it excludes certain goods from eligibility as specified in section 269SJ, ensuring that some goods remain subject to standard tariffs. The Act may also be extended or restricted through subordinate instruments, such as regulations or further orders, which can clarify or refine the application of tariff concessions. Importantly, the Act ensures that any TCOs do not disadvantage existing rights or impose liabilities for actions taken prior to the TCO's effective date.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0610683 under the Customs Act 1901 include section 269F, which allows for an application to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO), and section 269C, which sets out the core criteria that must be satisfied for the CEO to consider making a TCO. Section 269F requires a person to apply for a TCO in respect of goods, and if the CEO is satisfied that the application does not pertain to goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO, the CEO must then assess whether the application meets the core criteria. Section 269C stipulates that the application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged.
The Act imposes specific obligations and requirements on the parties or entities it governs. Under section 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. This ensures transparency and provides an opportunity for interested parties to voice their concerns. Additionally, section 269P(3) mandates that if the CEO is satisfied that a TCO application meets the core criteria, a written order declaring the goods subject to the TCO must be made. The CEO's decision to make the order is based on ensuring that no substitutable goods were produced in Australia on the day the application was lodged.
There are no specific offences, penalties, or civil/criminal consequences outlined in the explanatory statement for the breach of the provisions in the Tariff Concession Instrument No. 0610683. However, the Act generally provides for penalties for non-compliance with customs-related regulations. Under the Customs Act 1901, penalties can include fines and imprisonment for breaches such as incorrect declarations or fraudulent activities. The maximum penalties can vary depending on the severity of the offence, but they are intended to enforce compliance with customs laws and regulations. For specific penalties related to customs duty and TCOs, reference to the relevant sections of the Customs Act 1901 and associated regulations would be necessary.