EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617154
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.
Signum Specialties Pty Ltd applied for a TCO in respect of certain thermoformer parts on 12 September 2006.
Instrument
TCO No 0617154 was made on 8 December 2006. It declares that those certain thermoformer parts 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. 0617154 is taken to have come into force on 12 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 Tariff Concession Instrument No. 0617154, enacted under the Customs Act 1901, was introduced to address the need for a streamlined process by which certain goods can receive tariff concessions, thereby reducing the customs duty applicable to them. This legislative instrument empowers the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods where it is determined that no substitutable goods are produced in Australia, thus meeting the core criteria set out in the Customs Act. The instrument aims to facilitate the reduction of customs duty for specific goods, providing economic benefits to importers by lowering the tariff rates, which in turn can reduce the cost of imported goods and potentially lower consumer prices. This was enacted by the Parliament of Australia with the intent to support trade and economic efficiency by ensuring that certain goods can enter the Australian market at a lower customs duty rate when appropriate.
Scope and Application
The Tariff Concession Instrument No. 0617154 under the Customs Act 1901 applies to specific goods, in this case certain thermoformer parts, and is targeted at entities or individuals involved in the importation of these goods. The instrument facilitates tariff concessions by reducing the customs duty from the general rate of 5% to 0% for the specified goods, provided that no substitutable goods are produced in Australia. The scope of the Act extends to the entire Commonwealth of Australia, governing the customs duties and tariff concessions applicable nationwide. The Act does not impose any new liabilities on individuals or entities, and importantly, it does not disadvantage any person by affecting their rights as they stood before the date of registration. The instrument was made effective from the date the application was lodged, 12 September 2006, and no submissions were received opposing the making of the order. The application of this Act can be further refined or extended through subordinate instruments, allowing for specific amendments or additions to the list of goods eligible for tariff concessions.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0617154 under the Customs Act 1901 include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ. Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, which stipulates that no substitutable goods were produced in Australia in the ordinary course of business, the CEO is required to make a written order declaring that the specified goods are subject to a lower rate of customs duty as prescribed in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed on parties by this legislation involve ensuring that any application for a TCO adheres to the criteria specified in section 269C. The CEO is mandated to assess whether the application meets these criteria, particularly focusing on whether any substitutable goods were produced in Australia in the ordinary course of business. Furthermore, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting any person who might oppose the TCO to lodge a submission. The CEO is also required to consider any such submissions received in response to the Gazette notice.
The legislation outlines specific consequences for breaches. Although the explanatory statement does not detail specific offences under this TCO, breaches of the Customs Act 1901 in general could result in both civil and criminal penalties. For instance, contraventions of the Act may lead to fines and/or imprisonment, depending on the severity of the breach. The maximum penalties can vary significantly, but for serious offences, the Act allows for substantial fines and imprisonment for up to five years. The exact penalties depend on the specific breach and the discretion of the court.
Overall, the Tariff Concession Instrument No. 0617154 provides a structured process for obtaining tariff concessions on certain goods, ensuring that applications are properly vetted and transparent. It sets out clear obligations for the CEO and potential applicants, while also outlining the procedural steps that must be followed. The potential consequences for non-compliance highlight the importance of adhering to the legislative requirements.