EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617773
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 0617773 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 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. 0617773 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 Tariff Concession Instrument No. 0617773 was enacted in 2007 under the Customs Act 1901 to address the need for tariff concessions for specific imported goods that do not have Australian-made substitutes. This instrument was introduced to streamline the process by which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) to provide reduced customs duty rates for goods not produced domestically, thereby supporting trade and economic efficiency. The instrument was made in response to an application by Q-fit Australasia Pty Ltd for tariff concessions on certain jointing sheets, which was accepted by the CEO as it met the core criteria specified in the Customs Act, notably the absence of substitutable goods produced in Australia. This legislative instrument aims to ensure that the tariff concessions do not disadvantage any existing rights holders and allows for potential duty refunds to importers of these goods from the date the TCO was taken to have come into effect.
Scope and Application
The Customs Act 1901 applies to all entities and individuals involved in the importation of goods into Australia, particularly those seeking tariff concessions on specific items. The Act empowers the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to reduce customs duty on certain goods, provided the application meets the core criteria specified in the legislation. This includes ensuring that no substitutable goods are produced in Australia at the time of application. The geographic reach of this Act is national, as it applies across all states and territories in Australia. Any entity, such as Q-fit Australasia Pty Ltd, can apply for a TCO, provided the goods in question are not specified as excludable under section 269SJ of the Act. The application process involves public notification, allowing interested parties to submit objections if they believe the concession should not be granted. The application for a TCO is effective from the date it is lodged, as per subsection 269S(1) of the Act. Importantly, the TCO does not retroactively affect the rights of any person or impose new liabilities, although it does allow for duty refunds to importers under certain conditions.
Key Provisions
The primary sections of this legislation, specifically Section 269F of the Customs Act 1901, allow for the application to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. The application process is subject to certain criteria outlined in Section 269C, which mandates that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must then decide whether the application meets these core criteria, and if satisfied, issue a written TCO (Section 269P(3)). The specific TCO No. 0617773, made on 12 January 2007, pertains to certain jointing sheets, declaring that these goods are subject to a prescribed item of Schedule 4 to the Tariff, resulting in a free rate of duty instead of the general rate of 5%.
The obligations imposed by the Act on the parties involved, particularly the CEO, include the mandatory assessment of the TCO application against the specified criteria and the publication of a notice in the Gazette inviting any interested parties to submit their views on the proposed concession (Section 269K(1)). In this case, the CEO received no submissions in response to the invitation. Moreover, the Act requires that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO's registration (Subsection 269S(1)). The rights of importers are beneficially affected as they can apply for a refund of duty on goods imported since the TCO's effective date.
The legislation also delineates consequences for non-compliance. While the explanatory statement does not specify detailed offences, penalties, or consequences for breach, it is implied that failure to adhere to the provisions regarding the application and issuance of TCOs could result in legal challenges or other administrative actions. The maximum penalties for breaches of the Customs Act 1901 can vary significantly depending on the nature and severity of the breach, but they can include substantial fines and, in some cases, imprisonment. The specifics of penalties would be governed by other sections of the Act and associated regulations.