EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613426
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.
3M Australia Pty Ltd applied for a TCO in respect of certain scourer and/or cleaning pads on 14 August 2006.
Instrument
TCO No 0613426 was made on 3 November 2006. It declares that those certain scourer and/or cleaning pads 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. 0613426 is taken to have come into force on 14 August 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. 0613426, enacted in 2006, was introduced under the Customs Act 1901 to address the issue of providing tariff concessions for certain imported goods. The Customs Act 1901, managed by the Parliament of Australia, allows for the creation of Tariff Concession Orders (TCOs) to apply lower customs duty rates on specified goods. This particular instrument was created in response to an application by 3M Australia Pty Ltd for a tariff concession on certain scourer and/or cleaning pads, leading to a reduction in the customs duty rate from 5% to 0%. The policy objective behind this concession is to support Australian businesses by potentially lowering the cost of importing specific goods that are not produced domestically, thereby enhancing competitiveness. The instrument was published in the Gazette, inviting any objections, but none were received, and it came into force on the date the application was lodged, 14 August 2006.
Scope and Application
The Tariff Concession Order No. 0613426, made under the Customs Act 1901, applies to certain scourer and/or cleaning pads specified in the order. It is designed to provide a concession on customs duty for these goods, reducing the rate from the general 5% to 0%. This order is applicable to the entity that applied for the tariff concession, 3M Australia Pty Ltd, and any other entities importing similar goods after the order’s effective date. The geographic reach of this legislation is national, as it pertains to customs duties across Australia. The legislation does not specify exclusions or exemptions beyond the goods identified in the order and those that cannot be subject to a tariff concession as outlined in section 269SJ of the Act. The application of the Act may be extended or restricted through subordinate instruments, but the primary scope and effect are as specified in the Tariff Concession Order No. 0613426. The order came into force on the date of application, 14 August 2006, and it does not affect any pre-existing rights or impose any liabilities on persons other than the Commonwealth.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0613426 under the Customs Act 1901 include section 269C, which outlines the core criteria that a Tariff Concession Order (TCO) application must meet. According to section 269C, an application meets the core criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This is further defined in sections 269D, 269E, and 269F, which explain the meanings of 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a TCO (section 269P(3)).
The Act imposes specific obligations on applicants and the CEO. Applicants, such as 3M Australia Pty Ltd in this case, must ensure that their application meets the core criteria set out in the Act. This includes providing sufficient evidence that no substitutable goods were produced in Australia at the time of application. The CEO, on the other hand, has the responsibility to review the application, determine if it meets the core criteria, and if satisfied, make a TCO. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting the application, inviting any interested parties to lodge a submission if they believe the TCO should not be made (subsection 269K(1)).
Breach of the conditions set out in the Customs Act 1901 or failure to comply with the obligations of the TCO may lead to various consequences. While the explanatory statement does not specify exact offences or penalties, breaches of customs regulations generally can result in fines or legal action. The maximum penalties for offences under the Customs Act 1901 can vary significantly depending on the severity of the breach, but can include substantial fines and, in some cases, imprisonment. It is important for all parties involved to adhere to the requirements and obligations outlined in the Act to avoid such consequences.