EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612229
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.
Bon Trading Co applied for a TCO in respect of certain handheld flameguns on 21 July 2006.
Instrument
TCO No 0612229 was made on 06 October 2006. It declares that those certain handheld flameguns 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. 0612229 is taken to have come into force on 21 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, enacted by the Australian Parliament, provides a framework for managing customs duties and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. These TCOs offer reduced customs duty rates on specific goods, subject to certain conditions. The problem or gap addressed by the Act is the need for a mechanism to grant tariff concessions on goods that are not domestically produced in a substitutable form. This helps to promote trade by making imported goods more competitively priced. Instrument No. 0612229, made under the authority of the Act, was introduced to provide tariff concessions for certain handheld flameguns, as no substitutable goods were produced in Australia. The Customs Act 1901 aims to facilitate trade while ensuring that the rights of importers are protected, and it allows for the refund of duties paid on eligible goods under certain conditions.
Scope and Application
The Tariff Concession Instrument No. 0612229, made under the Customs Act 1901, applies specifically to the application and processing of Tariff Concession Orders (TCOs) for goods, which in this case are certain handheld flameguns. The Act governs the process through which a TCO can be applied for and granted by the Chief Executive Officer of Customs (CEO), provided that the goods in question meet the specified criteria such as not having substitutable goods produced in Australia. The application and subsequent grant of a TCO is subject to public notice and consultation, although in this instance, no submissions were received in response to the published notice. The instrument has a national reach, applying across Australia as it is part of the federal Customs Act 1901. The TCO does not affect any existing rights or impose any new liabilities on persons other than the Commonwealth, although it does provide for potential duty refunds for importers of the specified goods. The scope of the Act can be extended or restricted through subordinate instruments, which may include regulations or further orders under the Customs Act 1901.
Key Provisions
The Tariff Concession Order No. 0612229, made under section 269F of the Customs Act 1901 (the Act), applies a concessional rate of customs duty to certain handheld flameguns. According to section 269P(3) of the Act, the Chief Executive Officer of Customs (the CEO) must make a written order if satisfied that the application for a Tariff Concession Order (TCO) meets the core criteria specified in section 269C. In this case, the CEO was satisfied that no substitutable goods were produced in Australia, as required by section 269C, and therefore, issued TCO No. 0612229 on 6 October 2006.
Under this TCO, the general rate of duty on the specified handheld flameguns is reduced to free, as opposed to the standard 5% rate specified in item 50 of Schedule 4 to the Customs Tariff Act 1995 (the Tariff). This concessional rate applies to goods imported from the date the TCO was lodged, 21 July 2006, as per subsection 269S(1) of the Act. The TCO ensures that the rights of importers are beneficially affected, with no adverse impact on any person’s rights or liabilities incurred prior to the TCO's effective date.
The obligations imposed by the Act on parties and entities governed by it include the requirement for the CEO to assess whether a TCO application meets the core criteria as stipulated in section 269C. If satisfied, the CEO must make a written TCO order as per section 269P(3). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions against the TCO, as mandated by subsection 269K(1) of the Act. In this instance, the CEO published the notice and received no submissions. Importers must also comply with the conditions set forth in the TCO to benefit from the reduced duty rate, including applying for duty refunds on goods imported since the TCO's effective date.
Failure to comply with the provisions of the Customs Act 1901 and associated regulations may result in civil or criminal penalties. For instance, if an entity submits a false or misleading application for a TCO, it could be subject to fines and penalties under the Act. Specifically, under section 269T of the Act, any person who knowingly makes a false or misleading statement in an application for a TCO is liable to a penalty of up to 10,000 penalty units. Additionally, any individual or entity found to be in breach of the Act may face legal action, including fines or imprisonment, depending on the severity and intent of the breach. The penalties aim to ensure compliance and maintain the integrity of the tariff concession scheme.