EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617772
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 jointing sheets on 19 October 2006.
Instrument
TCO No 0617772 was made on 12 January 2007. It declares that those certain 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 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. 0617772 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 was enacted to provide a comprehensive framework for the administration of customs and excise duties in Australia. Part XVA of this Act specifically addresses the scheme under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs (CEO). This legislative framework was designed to address the need for tariff concessions on certain imported goods, ensuring that these goods receive preferential duty rates. The Tariff Concession Instrument No. 0617772, enacted in 2007, exemplifies the application of this scheme. In this instance, Q-fit Australasia Pty Ltd successfully applied for a TCO for certain jointing sheets, resulting in a concession that reduced the duty rate from 5% to 0%. The policy objective underlying this legislation is to facilitate the importation of goods that are not produced in Australia, thereby supporting domestic industries and consumers by making certain products more affordable.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The legislation applies to any person or entity that seeks a reduction in customs duty on imported goods by applying for a TCO. The core criteria for the CEO's decision to grant a TCO include the absence of substitutable goods produced in Australia in the ordinary course of business. This concession is available on a national level, affecting the rights of importers beneficially by allowing them to apply for refunds of duty on goods imported since the date the TCO is taken to have come into force. The TCO does not disadvantage or impose liabilities on any person other than the Commonwealth regarding activities occurring prior to the registration date. The scope of the Act extends through subordinate instruments, which may further detail the application and administration of TCOs.
Key Provisions
The main operative sections of the Customs Act 1901, as applied in this instance, involve the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. Specifically, section 269F allows for an application to be made for a TCO concerning certain goods, while section 269C stipulates that such an application will meet 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 criteria, they are mandated by section 269P(3) to issue a written TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
Under this legislation, the obligations imposed on parties, particularly the CEO of Customs, include ensuring that the application for a TCO is reviewed against the core criteria. This involves verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as per section 269C. The CEO must also publish a notice in the Gazette, inviting submissions from any person who may object to the making of the TCO, in accordance with subsection 269K(1). If no objections are received, the CEO proceeds to issue the TCO.
Breaches of the provisions within this legislation can result in civil or criminal consequences. While the specific Act does not detail maximum penalties for breaches, it is within the broader framework of the Customs Act 1901 that penalties would be determined. For example, penalties for misleading or deceptive conduct in relation to customs and excise matters can include fines and imprisonment under the general provisions of the Customs Act and the Crimes Act 1914. Importers who take advantage of the TCO for goods imported before the effective date of the TCO may also face penalties for incorrectly claiming tariff concessions.
The instrument in question, TCO No. 0617772, has been made effective from 19 October 2006, the date the application was lodged, as per subsection 269S(1). Importantly, this TCO does not affect the rights of any person, except the Commonwealth, in a manner that would disadvantage them or impose liabilities for actions taken prior to the TCO's effective date. Importers of the specified jointing sheets will be able to apply for a refund of duty on goods imported since this date under paragraph 126(1)(r) of the Regulations.