EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618337
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.
Bandag Manufacturing Pty Ltd applied for a TCO in respect of certain rubber tyre buffers on 07 November 2006.
Instrument
TCO No 0618337 was made on 30 January 2007. It declares that those certain rubber tyre buffers 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. 0618337 is taken to have come into force on 07 November 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 imposition of customs duties and the administration of import and export regulations. One of the key features of this Act is the provision for Tariff Concession Orders (TCOs), which allow for the concession of customs duties on certain goods under specific conditions. The explanatory statement for Tariff Concession Instrument No. 0618337 indicates that this instrument was introduced to address the specific issue of applying lower customs duties to rubber tyre buffers, as requested by Bandag Manufacturing Pty Ltd. The Tariff Concession Order was made to ensure that no substitutable goods were produced in Australia, thereby meeting the core criteria for a concession under the Act. The primary policy objective here is to provide relief to importers by reducing the customs duty on these specific goods, thus potentially lowering the cost of imported goods and encouraging trade.
Scope and Application
The Tariff Concession Instrument No. 0618337 applies to certain rubber tyre buffers, which are subject to a concession on the rate of customs duty under the Customs Act 1901. Specifically, the instrument applies to the entity that applied for the concession, Bandag Manufacturing Pty Ltd, and to any subsequent importers of the specified goods. The instrument's scope extends to the entire Commonwealth of Australia, governed by the provisions set forth in the Customs Act 1901. The Act mandates that the Chief Executive Officer of Customs must consider applications for tariff concessions and determine if they meet the core criteria, such as the absence of substitutable goods produced in Australia. The application process and the concession itself are subject to the conditions and definitions provided in sections 269C, 269D, 269E, and 269SJ of the Customs Act 1901. Notably, the instrument does not affect any pre-existing rights or impose any liabilities on persons other than the Commonwealth, ensuring that the rights of importers are positively impacted by the concession, allowing them to apply for duty refunds on goods imported from the date the concession is deemed to have come into effect.
Key Provisions
The primary operative sections of this legislation concern the making and effects of a Tariff Concession Order (TCO) under the Customs Act 1901. Section 269F of the Act allows for applications to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods do not fall under the exclusions specified in section 269SJ. If the application is not excluded, the CEO must assess whether it meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. If the core criteria are met, the CEO must issue a written TCO (section 269P(3)), as seen in TCO No 0618337, which applies a zero rate of duty to certain rubber tyre buffers instead of the general rate of 5%.
The Act imposes specific obligations on the CEO in relation to TCOs. Under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. In this instance, no submissions were received in response to the published notice. Furthermore, section 269S(1) dictates that a TCO is taken to have come into force on the date the application for the TCO was lodged, which in this case was 7 November 2006. This means that the TCO's effects are retroactive to the date of the application, without disadvantaging any person other than the Commonwealth or imposing liabilities for actions taken before the TCO was registered.
Breaching the provisions of the Customs Act 1901 can result in serious consequences. While the explanatory statement does not specify particular offences or penalties under this TCO, the Act generally provides for both civil and criminal penalties for breaches. Civil penalties may include financial penalties and the recovery of unpaid duties, while criminal penalties could include fines and imprisonment, depending on the nature and severity of the breach. The maximum penalties would be determined according to the specific provisions of the Customs Act and the associated regulations. For instance, subsection 126(1)(r) of the Regulations allows importers to apply for a refund of duty on goods imported since the TCO came into effect, ensuring that the rights of importers are beneficially affected without imposing any new liabilities.