EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617774
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 0617774 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. 0617774 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, provides a framework for the administration of customs and excise duties, including the ability for the Chief Executive Officer of Customs to grant tariff concession orders (TCOs) on certain goods. This process was designed to address the problem of ensuring that Australian industries are protected from unfair competition while also facilitating the import of goods necessary for domestic consumption and production. The Explanatory Statement for Tariff Concession Instrument No. 0617774 clarifies the mechanism by which these concessions are granted, focusing on the criteria for TCO applications and the effect of such orders on duty rates. In this case, the instrument aims to provide a tariff concession for certain jointing sheets, resulting in a reduction of the duty rate from 5% to free, thereby benefiting importers of these goods.
Scope and Application
The Tariff Concession Instrument No. 0617774, made under Part XVA of the Customs Act 1901, applies to specific goods that are the subject of a Tariff Concession Order (TCO). The Act allows the Chief Executive Officer of Customs (CEO) to grant a TCO to reduce the customs duty on certain goods, provided the application meets the core criteria set out in the Act, such as the absence of substitutable goods produced in Australia. This instrument, TCO No. 0617774, was made on 12 January 2007, in response to an application by Q-fit Australasia Pty Ltd for certain jointing sheets. The TCO applies the general rate of duty of 5% to these goods, but under the TCO, the duty is free. The geographic reach of this Act is national, as it pertains to the Commonwealth of Australia and its customs duties. The instrument does not affect the rights of any person, except to beneficially affect the rights of importers who can apply for a refund of duty on goods imported since the day the TCO was taken to have come into force. The Act does not impose any liabilities on any person as a result of this TCO. The CEO must publish a notice in the Gazette inviting submissions from interested parties, although in this instance, no submissions were received.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). An individual or entity may apply to the CEO for a TCO in relation to certain goods, and if the application meets the core criteria, the CEO must make a written order that effectively applies a lower customs duty rate to these goods (section 269C and 269P(3)). In this instance, Tariff Concession Order No. 0617774 pertains to certain jointing sheets, for which the general rate of duty is 5%, but the TCO reduces this to free (item 50 of Schedule 4 to the Customs Tariff Act 1995).
The obligations imposed by the Customs Act 1901 on parties involved in the application process for a TCO are primarily on the applicant, who must ensure their application satisfies the core criteria. These criteria include the condition that, on the date the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business (section 269C). The CEO, on their part, must assess the application against these criteria, and if satisfied, proceed to issue a TCO. Moreover, the CEO is obligated to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO within a specified period (subsection 269K(1)). In the case of TCO No. 0617774, no objections were received.
The Customs Act 1901 does not explicitly detail specific offences or penalties for breaches related to the TCO process, but general provisions within the Act allow for enforcement actions against non-compliance with customs regulations. For example, failure to comply with a TCO or any other customs-related requirement could result in civil or criminal penalties, including fines and imprisonment, depending on the severity and intent of the breach. The exact penalties would be determined based on the specific provisions of the Customs Act 1901 and any relevant subsidiary legislation. However, the explanatory statement for TCO No. 0617774 does not indicate any specific penalties or enforcement measures for this particular concession.