EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617771
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.
Q-fit Australasia Pty Ltd applied for a TCO in respect of certain carbon and/or graphite fibre jointing sheets on 19 October 2006.
Instrument
TCO No 0617771 was made on 12 January 2007. It declares that those certain carbon and/or graphite fibre jointing sheets 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. 0617771 is taken to have come into force on 19 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, enacted by the Australian Parliament, establishes a framework for the imposition of customs duty on imported goods, among other provisions. A specific problem the Act addresses is the application for tariff concession orders (TCOs) for certain goods, which may reduce or eliminate the customs duty on these goods. The Tariff Concession Instrument No. 0617771, made under the Customs Act 1901, was introduced to address the specific issue of granting tariff concessions for certain carbon and/or graphite fibre jointing sheets by Q-fit Australasia Pty Ltd. The instrument was enacted to facilitate the reduction of customs duty for these goods, thereby promoting their importation into Australia and potentially benefiting the rights of importers. The policy objective behind this instrument is to ensure that tariff concessions are granted in a transparent and non-discriminatory manner, encouraging fair trade practices.
Scope and Application
The Tariff Concession Instrument No. 0617771 under the Customs Act 1901 applies to specific goods, namely certain carbon and/or graphite fibre jointing sheets, as specified by Q-fit Australasia Pty Ltd in their application for a Tariff Concession Order (TCO). This Act is applicable to individuals and entities seeking to import these goods into Australia, thereby benefiting from a concessional rate of customs duty. The legislation is administered by the Chief Executive Officer of Customs, who assesses whether the application meets the core criteria stipulated in the Act, particularly focusing on whether there are substitutable goods produced in Australia. The TCO has a national jurisdictional reach, impacting all importers of the specified goods across Australia. The Act excludes certain goods from eligibility for TCOs, as defined in section 269SJ of the Act, and imposes no liabilities on individuals or entities for actions taken prior to the TCO's effective date. The application of the TCO is further regulated through subordinate instruments, including the Customs Tariff Act 1995 and the Customs Regulations 1998, which provide detailed mechanisms for the concessional tariff rates and the administrative process.
Key Provisions
The main sections of this legislation, as outlined in the explanatory statement, provide the framework for Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the application is not for goods specified in section 269SJ, the CEO must determine if it meets the core criteria in section 269C. These criteria require that, 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 criteria, they must make a written order (a TCO) under section 269P(3), declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by this Act on parties or entities it governs primarily concern the application and approval process for TCOs. The CEO of Customs must ensure that all applications are assessed according to the criteria set out in sections 269C and 269SJ. Additionally, the CEO is required to publish a notice in the Gazette under subsection 269K(1) once an application is accepted as valid, inviting submissions from any interested parties. In the case of TCO No. 0617771, the CEO was required to verify that no substitutable goods were produced in Australia for carbon and/or graphite fibre jointing sheets, and subsequently make the TCO if the criteria were met.
The Act includes provisions for potential consequences if the terms of the TCO are breached. Although the explanatory statement does not explicitly outline specific offences or penalties, breaches of the Customs Act 1901 can generally result in civil or criminal penalties. For instance, under section 283 of the Act, any person who contravenes a provision of the Act may be liable to a penalty of up to $22,200 for individuals and $111,000 for bodies corporate. Additionally, in cases where a breach is deemed to be fraudulent or involves a significant amount of duty evasion, the penalties can be substantially higher, with potential imprisonment terms also applicable.
Overall, the Tariff Concession Instrument No. 0617771 provides a mechanism for reducing customs duty on specific goods, subject to stringent criteria that ensure no domestic production of substitutable goods. The obligations on the CEO and the potential consequences for breaches are clearly outlined to maintain the integrity of the customs duty system.