EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617936
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.
Roland DG Australia Pty Ltd applied for a TCO in respect of certain inkjet printer cutter on 28 September 2006.
Instrument
TCO No 0617936 was made on 22 December 2006. It declares that those certain inkjet printer cutter 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. 0617936 is taken to have come into force on 28 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for customs duties and other related matters. It includes provisions for Tariff Concession Orders (TCOs), which can reduce the customs duty on certain goods. The problem or gap in the legislation addressed by the Act is the need for a mechanism to provide tariff relief for goods that are not produced in Australia or have no suitable domestic substitutes. The Customs Act 1901 aims to facilitate trade by offering tariff concessions under certain conditions, thus encouraging the importation of goods that are not locally manufactured. The Tariff Concession Instrument No. 0617936 is an example of how the Act is applied to specific goods, in this case, certain inkjet printer cutters, to reduce their customs duty from 5% to 0%.
Scope and Application
The Tariff Concession Instrument No. 0617936 applies to entities and individuals who are involved in the importation of certain inkjet printer cutters, specifically those identified in the instrument. The application of this instrument is grounded in Part XVA of the Customs Act 1901, which facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The TCO reduces the customs duty rate on the specified goods from the general rate of 5% to 0%. The instrument ensures that the goods in question are not substitutable by any products manufactured in Australia and are thus eligible for the concession under the specified conditions. The geographic reach of this legislation is national, as it pertains to the customs duties administered under the Commonwealth's purview. There are no exclusions or exemptions specified within the instrument itself, though it does note that the rights of importers are beneficially affected and that the TCO does not impose any liabilities on persons other than the Commonwealth. The instrument also outlines the process of public consultation and the effective date of the concession, which is retroactive to the date of the application submission.
Key Provisions
The Customs Act 1901, particularly in Part XVA, governs the making of Tariff Concession Orders (TCOs) that provide lower rates of customs duty on specified goods. According to section 269F, a person may apply to the Chief Executive Officer of Customs (the CEO) for a TCO if certain conditions are met. If the CEO is satisfied that the application does not involve goods listed in section 269SJ, which are ineligible for a TCO, they must then determine if the application meets the core criteria outlined in section 269C. This requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269P(3) respectively.
Once the CEO is satisfied that the application meets these core criteria, they must issue a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, as per section 269P(3). This process was followed in the case of Roland DG Australia Pty Ltd, who applied for a TCO on certain inkjet printer cutters on 28 September 2006. The CEO issued TCO No. 0617936 on 22 December 2006, which declared that these goods were subject to item 50 of Schedule 4, resulting in a 0% duty rate instead of the general 5% rate.
The obligations imposed by the Act on parties applying for a TCO include ensuring that the application is valid and meets the core criteria. The CEO has the duty to assess the application and make a decision within the legal framework provided by the Act. Additionally, the CEO is required to publish a notice in the Gazette inviting any submissions from interested parties once the application is accepted as valid, as per subsection 269K(1). This ensures transparency and provides an opportunity for stakeholders to voice any objections before the TCO is made.
In terms of consequences for non-compliance, the Act does not explicitly state penalties for breaches related to TCO applications. However, any actions taken in contravention of the Act's provisions could potentially lead to legal action under other sections of the Customs Act 1901, which could include fines or imprisonment. The Act ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO, and it does not impose any new liabilities on any person as per the provisions in section 269S.