EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0614918
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.
Hunter Douglas Limited applied for a TCO in respect of certain external awning guide rods on 30 October 2006.
Instrument
TCO No 0614918 was made on 19 January 2007. It declares that those certain external awning guide rods 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. 0614918 is taken to have come into force on 30 October 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 to provide a comprehensive framework for the regulation of customs and excise in Australia, ensuring efficient border control and revenue collection. In addressing gaps in the tariff system, the Act allows for the creation of Tariff Concession Orders (TCOs) to provide lower rates of customs duty on certain goods under specific conditions. Enacted by the Australian Parliament, the primary policy objective is to promote fair trade practices and economic efficiency by reducing the cost of imported goods for businesses and consumers. The Tariff Concession Instrument No. 0614918, made in 2007, exemplifies this by granting a tariff concession on certain external awning guide rods, lowering the duty rate from 5% to free, thereby benefiting importers and potentially reducing costs for end-users.
Scope and Application
The Customs Act 1901 applies to individuals and entities involved in the importation of goods into Australia, particularly those seeking tariff concessions on specific items. The Act facilitates the establishment of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs (CEO), which lowers the customs duty rate for goods not produced in Australia and not listed in the exclusions of section 269SJ. This legislation targets industries and businesses engaged in the importation of goods that qualify for tariff concessions, ensuring that such entities can benefit from reduced customs duties. The geographic reach of this Act is national, as it applies across all states and territories in Australia. However, the Act does not apply to goods specified in section 269SJ and excludes any substitutable goods produced in Australia. The CEO must adhere to the core criteria outlined in sections 269C and 269D, including ensuring that no substitutable goods are produced domestically before granting a TCO. The instrument TCO No. 0614918, for example, was made in respect of certain external awning guide rods, setting their duty rate to free, effective from the date the application was lodged.
Key Provisions
The main provisions of the Tariff Concession Instrument No. 0614918 involve the declaration of certain external awning guide rods as eligible for a tariff concession under the Customs Act 1901 (section 269C). Specifically, the instrument, which was made on 19 January 2007, declares that these goods are subject to a tariff rate of free duty, as opposed to the general rate of 5% (subsection 269P(3)). This tariff concession applies from the date the application was lodged, which was 30 October 2006 (subsection 269S(1)).
The obligations imposed by the Act on the parties involved are primarily on the Chief Executive Officer of Customs (CEO), who must assess whether an application for a tariff concession meets the core criteria. According to section 269C, the CEO must ensure that no substitutable goods were produced in Australia on the date the application was lodged. The CEO must also publish a notice in the Gazette inviting submissions from interested parties if any exist (subsection 269K(1)). In this case, no submissions were received, which facilitated the instrument's creation. The Act further stipulates that the tariff concession does not affect the rights of any person, except to benefit importers by allowing them to apply for a refund of duty on goods imported since the date the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
The Customs Act 1901 also outlines the potential consequences for non-compliance or breaches related to the tariff concession. While the explanatory statement does not detail specific penalties, the Act generally provides for both civil and criminal penalties for breaches of customs regulations. These penalties can include fines and imprisonment, depending on the severity of the offence. The exact penalties would be determined by the relevant provisions of the Act and any additional regulations or guidelines that may apply.