EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0611597
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.
Graffica Pty Ltd applied for a TCO in respect of certain laminators on 10 July 2006.
Instrument
TCO No 0611597 was made on 29 September 2006. It declares that those certain laminators 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. 0611597 is taken to have come into force on 10 July 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. 0611597, made under the Customs Act 1901, aims to provide tariff concessions for specific goods, in this case, certain laminators, thereby addressing the problem of high customs duties on imported goods that have no local substitutes. Enacted by the Chief Executive Officer of Customs (CEO), the instrument responds to an application by Graffica Pty Ltd, seeking a tariff concession order (TCO) for their products. The CEO's decision to grant the concession was based on the absence of substitutable goods produced in Australia, aligning with the core criteria set out in section 269C of the Act. The TCO, which came into effect on the date of application, reduces the customs duty on these specific laminators from 5% to 0%, benefiting importers by potentially allowing them to claim refunds for duties paid prior to the concession. This legislative measure ensures that the rights and obligations of parties are not adversely affected by the introduction of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0611597, established under Part XVA of the Customs Act 1901, applies specifically to the process of granting Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The Act enables the CEO to issue TCOs for goods that meet certain criteria, such as the absence of substitutable goods produced in Australia at the time of application, thereby allowing for a lower rate of customs duty on specified goods. This legislation is applicable to any person or entity that submits an application for a TCO for goods not listed in section 269SJ of the Act, which prohibits certain goods from being subject to a TCO. The scope of the Act is national, as it operates within the framework of the Commonwealth's customs legislation. The CEO's decision to issue a TCO is contingent on the application meeting the core criteria outlined in the Act, and the process includes mandatory publication in the Gazette to invite submissions from interested parties, although in this case, no submissions were received. The TCO in question, which came into force on 10 July 2006, pertains to certain laminators that are now subject to a 0% duty rate instead of the general 5%, benefiting the rights of importers by potentially allowing them to apply for a refund of duty paid on these goods since the effective date of the TCO.
Key Provisions
The Customs Act 1901 (the Act) allows for the creation of Tariff Concession Orders (TCOs) under section 269F, which can reduce the rate of customs duty on specific goods. To be eligible, an application must meet the core criteria set out in section 269C, primarily requiring that no substitutable goods were produced in Australia at the time of the application. The CEO of Customs must then decide if the application meets these criteria and, if so, issue a TCO as per section 269P(3). For example, Tariff Concession Order No. 0611597, made on 29 September 2006, applies a 0% duty rate to certain laminators, which otherwise attract a 5% duty.
Under this legislation, the CEO has specific obligations when considering a TCO application. Firstly, the CEO must ensure that the application is not for goods prohibited under section 269SJ of the Act. If the application is valid, the CEO must then check if the core criteria have been met, particularly focusing on whether substitutable goods were being produced in Australia on the date the application was lodged. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as required by section 269K(1). For the laminators in question, the CEO did not receive any submissions and proceeded to issue the TCO.
Entities and individuals affected by the TCO must adhere to the terms set out in the legislation. Importers of the specified goods can benefit by applying for a refund of duty paid on goods imported since the TCO was taken to have come into force, under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO came into force, as stated in the Act.
The Act outlines potential consequences for non-compliance with the terms of a TCO. While specific offences are not detailed in the explanatory statement, breaches of customs regulations generally can lead to civil and criminal penalties. For instance, penalties can include fines and imprisonment, depending on the severity of the breach. The maximum penalties are not specified in this particular explanatory statement but can be found in other sections of the Customs Act and related legislation. It is essential for all parties to comply with the TCO to avoid any legal repercussions.