EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617067
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.
Moffat Pty Ltd applied for a TCO in respect of certain conical rounders on 11 September 2006.
Instrument
TCO No 0617067 was made on 1 December 2006. It declares that those certain conical rounders 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. 0617067 is taken to have come into force on 11 September 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 Parliament of Australia, establishes a framework for the application of customs duty on imported goods. A significant component of this framework is the scheme for Tariff Concession Orders (TCOs), which allows for a lower rate of customs duty on specified goods. The Tariff Concession Instrument No. 0617067, enacted in 2006, addresses the gap in providing tariff concessions for certain conical rounders by the Chief Executive Officer of Customs. This instrument was introduced to ensure that the concession applies retroactively from the date the application was lodged, thereby benefiting importers who may have already paid duty on these goods. The policy objective is to facilitate trade by reducing the cost of importing certain goods, provided they meet the criteria of not having substitutable goods produced in Australia.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any person or entity seeking a concession on customs duty rates for specific goods. The application process outlined in section 269F requires the applicant to demonstrate that the goods in question are not specified in section 269SJ, which lists goods ineligible for TCOs. If the CEO determines that the application meets the core criteria set out in sections 269C, 269B, and 269D, a TCO is issued, effectively applying a lower duty rate to the specified goods. The application of TCOs is a national scheme, impacting all states and territories within Australia. However, the Act excludes certain goods from eligibility, ensuring that only those not produced in Australia or not substitutable by locally produced goods qualify. The application of TCOs may be further refined through subordinate instruments, allowing for the detailed specification of goods and duty rates.
Key Provisions
The key operative sections of the Customs Act 1901 (the Act) as outlined in Tariff Concession Instrument No. 0617067 include section 269C, which establishes that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO is satisfied that the application does not relate to goods specified in section 269SJ and that the core criteria are met, the CEO must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
These sections impose several obligations and requirements on the parties involved. Firstly, the CEO must ensure that a TCO application meets the core criteria by confirming that no substitutable goods were produced in Australia in the ordinary course of business. Once the CEO is satisfied, they must publish a notice in the Gazette inviting any interested parties to submit their views on whether the TCO should be made. The CEO must then consider any submissions received and decide on the application accordingly. If the application meets the core criteria, the CEO is required to make a TCO.
Additionally, under section 269K(1) of the Act, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice must include an invitation for any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. This ensures transparency and provides an opportunity for stakeholders to voice their concerns.
In terms of offences, penalties, or consequences for breach, the Act does not explicitly state penalties for non-compliance with the TCO provisions. However, the Act generally provides for offences and penalties related to customs and border control, which may apply if a party breaches any related requirements or engages in fraudulent activities. For example, section 240 of the Customs Act 1901 provides for civil and criminal penalties for contraventions of the Act, including fines and imprisonment. The specific penalties would depend on the nature and severity of the breach.