EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616288
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.
Artique Designs P/L applied for a TCO in respect of certain drinking bottles on 31 August 2006.
Instrument
TCO No 0616288 was made on 17 November 2006. It declares that those certain drinking bottles 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. 0616288 is taken to have come into force on 31 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 Customs Act 1901, through its Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which allow for a reduced rate of customs duty on specified goods. This mechanism was introduced to address the gap in tariff regulation by providing a streamlined process for lowering customs duty on certain imported goods, thereby potentially benefiting industries by reducing costs and improving competitiveness. Enacted by the Australian Parliament, the policy objective is to provide relief to industries that lack local production alternatives by allowing them to import goods at a reduced tariff rate, thus encouraging fair trade practices and supporting economic growth.
The Tariff Concession Instrument No. 0616288, made on 17 November 2006, specifically applies to certain drinking bottles, reducing their duty from the general rate of 5% to 0%. This was made possible after Artique Designs P/L applied for the concession on 31 August 2006, and the CEO determined that no substitutable goods were produced in Australia. The instrument’s commencement on 31 August 2006 ensures that importers can benefit from the reduced duty rate and potentially apply for duty refunds on imports made since that date. Importantly, the TCO does not impose any liabilities on non-Commonwealth entities and does not affect their rights adversely.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking tariff concessions on imported goods, with the scope of application determined by the CEO of Customs. Specifically, Part XVA of the Act allows for Tariff Concession Orders (TCOs) to be made when certain conditions are met, such as the absence of substitutable goods produced in Australia. This Act applies on a Commonwealth level and covers the process by which an application for a TCO can be made, assessed, and granted. Exclusions apply to goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The CEO’s decision to grant a TCO is subject to the criteria outlined in sections 269C, 269B, and 269D of the Act. The application process also involves public consultation, as mandated by section 269K(1) of the Act, ensuring transparency and fairness in the decision-making process. The TCO’s commencement date is the day the application is lodged, and it does not retroactively affect the rights of any person or impose new liabilities.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0616288 (TCO No. 0616288) under the Customs Act 1901 (the Act) are section 269C and section 269F. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of certain goods, provided these goods are not specified in section 269SJ of the Act. Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these core criteria, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, resulting in a reduced rate of duty.
The obligations imposed by the Act on the parties governed by it include the requirement for the CEO to evaluate the application against the core criteria outlined in section 269C. The CEO must ensure that the application pertains to goods not listed in section 269SJ, which excludes certain types of goods from being subject to a TCO. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission. In this instance, the CEO did not receive any submissions. The obligation extends to ensuring that the TCO does not affect the rights of any person adversely as at the date of registration and does not impose any liabilities on any person in respect of actions taken before the date of registration.
The Act also outlines potential offences and penalties for non-compliance with its provisions. While the explanatory statement does not specify the exact penalties, breaches of the Customs Act 1901 can generally lead to civil and criminal consequences. Civil penalties might include fines and other monetary penalties, while criminal penalties could result in imprisonment. The specific maximum penalties would be detailed in other sections of the Customs Act or related legislation. For example, knowingly making a false statement in an application for a TCO could lead to fines or imprisonment as stipulated in the relevant sections of the Act. Additionally, any person who fails to comply with the conditions of the TCO may face further civil or criminal penalties as determined by the relevant authorities.