EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0611859
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.
Silent Gliss Pty Ltd applied for a TCO in respect of certain bead chain on 13 July 2006.
Instrument
TCO No 0611859 was made on 22 September 2006. It declares that those certain bead chain 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. 0611859 is taken to have come into force on 13 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 Customs Act 1901 was amended to introduce the mechanism of Tariff Concession Orders (TCOs) through Part XVA. This part of the Act was enacted to provide a streamlined process for granting tariff concessions on certain goods, thereby addressing the need for a flexible approach to customs duty rates that can respond to specific economic and trade circumstances. The Tariff Concession Instrument No. 0611859 was introduced by the Commonwealth Parliament, specifically to address the application submitted by Silent Gliss Pty Ltd concerning bead chain, ensuring that the concession provided aligns with the overarching policy objective of promoting fair trade practices and economic efficiency. The explanatory statement reveals that the Tariff Concession Order was made to ensure that the application process is transparent and allows for public consultation, ultimately facilitating the reduction of customs duty on the specified goods from 5% to 0%.
Scope and Application
The Tariff Concession Instrument No. 0611859 under the Customs Act 1901 applies to Silent Gliss Pty Ltd’s application for a Tariff Concession Order (TCO) for certain bead chain, and it governs the duty rates for these specific goods. The Act applies to any individual or entity that seeks a tariff concession for goods that are not produced in Australia and for which no substitutable goods are produced in the ordinary course of business. The geographic scope of this legislation is national, as it pertains to customs duties at the federal level. The application is restricted to goods that are not specified in section 269SJ of the Act, which excludes certain items such as those that are harmful to public health, safety, or the environment, or those that are subject to a prohibition or restriction under another Act. The TCO provides a concession that reduces the duty on the specified bead chain from a general rate of 5% to 0%. The CEO of Customs, who is responsible for deciding on such applications, did not receive any submissions opposing the concession when the application was published in the Gazette. The TCO is effective from the date the application was lodged, which is 13 July 2006, and it does not affect any rights or liabilities accrued before this date.
Key Provisions
The Tariff Concession Instrument No. 0611859 pertains to the Customs Act 1901 and establishes a lower rate of customs duty on specific goods, in this case, certain bead chain. According to section 269F, an individual or entity can apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) if the goods in question are not specified in section 269SJ of the Act, which details goods that cannot be subject to a TCO. If the CEO determines that the application meets the core criteria outlined in section 269C, such as the absence of substitutable goods produced in Australia, a TCO is issued. This TCO, as per section 269P(3), specifies that the goods in question are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995, with a reduced rate of duty. For example, TCO No. 0611859, issued on 22 September 2006, reduced the duty on certain bead chain from 5% to 0%.
The Act imposes several obligations and requirements on the parties involved. The CEO is mandated, as per section 269K, to publish a notice in the Gazette inviting submissions from any interested parties once a TCO application is accepted as valid. This notice provides an opportunity for anyone who believes the TCO should not be granted to voice their concerns. In the case of TCO No. 0611859, no submissions were received in response to the published notice. Additionally, under section 269S, a TCO is considered to come into force on the date the application is lodged, which for TCO No. 0611859 was 13 July 2006.
Breach of the conditions set out in the Customs Act 1901 can lead to various legal consequences. While the explanatory statement does not specify particular offences or penalties for non-compliance with TCOs, general provisions within the Customs Act may apply. These could include fines and imprisonment for offences related to customs duties and imports. The specifics would depend on the nature and severity of the breach, as well as any relevant case law or subsequent amendments to the Act. Importers, however, are entitled to apply for a refund of duty on goods imported since the TCO came into force, as stipulated under paragraph 126(1)(r) of the Regulations, without incurring any new liabilities.