EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617972
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 landing zone fabrics on 26 October 2006.
Instrument
TCO No 0617972 was made on 12 January 2007. It declares that those certain hook landing zone fabrics 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. 0617972 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, provides a framework for managing customs duties on imported goods, including the ability for the Chief Executive Officer of Customs (CEO) to grant tariff concession orders (TCOs) that lower the rate of customs duty for certain goods. This legislative framework was introduced to address the need for flexibility in customs duty rates to support economic interests, particularly in cases where substitutable goods are not produced in Australia. Under section 269F of the Act, a TCO can be applied for by any person, and if the CEO is satisfied that the application meets the core criteria, such as the absence of substitutable goods produced in Australia, a TCO may be issued. The policy objective of this legislative scheme is to provide tariff relief to importers of goods for which no Australian-produced substitutes exist, thereby encouraging trade and potentially reducing costs for businesses and consumers.
Scope and Application
The Tariff Concession Instrument No. 0617972 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions on goods imported into Australia. Specifically, this instrument relates to applications for Tariff Concession Orders (TCOs) by those who can demonstrate that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. The scope of the Act encompasses the process of application, assessment by the Chief Executive Officer of Customs, and the issuance of a TCO if the criteria are met. The geographic reach of the Act is national, with its provisions applying across all states and territories in Australia. The Act does not impose any new liabilities on persons other than the Commonwealth and does not disadvantage anyone by affecting rights as they stood at the time of the application for the TCO. The Act may be extended or modified through subordinate instruments, although the primary legislation itself does not explicitly state this. The application process involves public notice and consultation, although in this specific case, no submissions were received in response to the notice published in the Gazette.
Key Provisions
The main sections of Tariff Concession Instrument No. 0617972 under the Customs Act 1901 include section 269F, which allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). Section 269C establishes the core criteria for an application to meet in order to be considered for a TCO, specifically focusing on the absence of substitutable goods produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied with the application, they must issue a written order declaring the goods eligible for the tariff concession. Finally, section 269S(1) specifies that the TCO comes into force on the day the application was lodged.
The Act imposes several obligations on parties involved in the TCO process. Firstly, any person seeking a TCO must apply to the CEO, ensuring that the application meets the criteria set out in section 269C. The CEO must then verify that the application does not pertain to goods specified in section 269SJ, which are ineligible for TCOs. Upon determining that the application meets the core criteria, the CEO must issue a TCO as outlined in section 269P(3). Additionally, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit any objections to the TCO, as stipulated in subsection 269K(1).
In terms of potential breaches and penalties, the Customs Act 1901 does not explicitly outline specific offences or penalties related to the making or breach of a TCO. However, any failure to comply with the requirements or obligations outlined in the Act could potentially lead to legal action under other relevant sections of the Act, or associated regulations. For example, providing false or misleading information in an application might lead to civil or criminal penalties under other parts of the Act, which can include fines and imprisonment. The precise penalties would depend on the specific nature and severity of the breach.