EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617970
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.
3M Australia Pty Ltd applied for a TCO in respect of certain hook tapes on 26 October 2006.
Instrument
TCO No 0617970 was made on 12 January 2007. It declares that those certain hook tapes 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. 0617970 is taken to have come into force on 26 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 Parliament of Australia, establishes a framework for the application of customs duty on imported goods. The 2007 Tariff Concession Instrument No. 0617970 was introduced to address the specific issue of tariff concessions for certain hook tapes, as applied for by 3M Australia Pty Ltd. This legislation allows for the reduction or exemption of customs duty on specified goods, provided they meet the criteria outlined in the Act, such as the absence of substitutable goods produced in Australia. The policy objective of this instrument is to facilitate the importation of these goods at a lower duty rate, thereby benefiting importers and potentially reducing the cost of these goods in the Australian market.
The instrument was made by the Chief Executive Officer of Customs following an application from 3M Australia Pty Ltd on 26 October 2006. The CEO determined that no substitutable goods were produced in Australia and subsequently issued Tariff Concession Order No. 0617970 on 12 January 2007. This order applies item 50 of Schedule 4 to the Customs Tariff Act 1995, setting the duty rate at free, down from the general rate of 5%. The order came into effect on the date of the application, 26 October 2006, and no submissions were received in opposition to the order. The rights of importers are positively affected, as they can apply for a refund of duty on goods imported since the effective date of the order.
Scope and Application
The Tariff Concession Instrument No. 0617970 applies to the import of specific hook tapes as designated in the instrument, benefiting from a reduced customs duty rate under the Customs Act 1901. This instrument, which was made by the Chief Executive Officer of Customs, pertains to the application for tariff concession orders (TCO) submitted by 3M Australia Pty Ltd on 26 October 2006. The Act applies to any entity seeking tariff concessions for goods that are not substitutable by Australian-produced goods, ensuring that such concessions do not disadvantage domestic production. The instrument has a national reach within Australia and is subject to the provisions of the Customs Act 1901 and the Customs Tariff Act 1995. Importantly, the instrument does not apply to goods specified in section 269SJ of the Act, which outlines goods ineligible for tariff concessions. The CEO must ensure that applications meet the core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business. The instrument’s application is effective from the date the application was lodged, with no retrospective effect on existing rights or liabilities.
Key Provisions
The key provisions of this legislation are primarily found in sections 269C, 269F, 269K, and 269P of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of certain goods. Section 269C specifies that a TCO application meets the core criteria if, on the day of application, no substitutable goods were produced in Australia in the ordinary course of business. Section 269K requires the CEO to publish a notice in the Gazette inviting submissions on the application, while Section 269P mandates that if the CEO is satisfied the application meets the core criteria, they must make a written order, the TCO, specifying the applicable tariff concession.
The Customs Act 1901 imposes several obligations on both the applicant and the CEO. The applicant must ensure their TCO application is valid and meets the core criteria as defined in Section 269C. This includes proving that no substitutable goods were produced in Australia on the day the application was lodged. The CEO, on the other hand, must review the application, assess whether it meets the core criteria, and make a decision accordingly. If the application is valid, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit their views on the application. Following this, the CEO must make a TCO if the application meets the core criteria.
The Act provides for both civil and criminal consequences for breaches of its provisions. While the explanatory statement does not specify exact penalties, it is understood that breaches of the Customs Act 1901 can lead to fines and imprisonment. The severity of the penalty depends on the nature and gravity of the offence. For example, knowingly making a false statement in a customs document could lead to a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both, under section 246AC of the Act. The Customs Act also includes provisions for administrative penalties, such as financial penalties for non-compliance with the Act or its regulations.
In conclusion, this legislation establishes a framework for applying tariff concessions on certain goods, ensuring that these concessions are only granted when no substitutable goods are produced in Australia. It places clear obligations on both the applicant and the CEO, and it outlines potential civil and criminal consequences for non-compliance. The aim is to facilitate fair trade practices while ensuring that Australian businesses are not disadvantaged.