EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618424
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.
P.M.S.I. Group Pty Limited applied for a TCO in respect of certain security gates and/or booths on 10 November 2006.
Instrument
TCO No 0618424 was made on 02 February 2007. It declares that those certain security gates and/or booths 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. 0618424 is taken to have come into force on 10 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 Tariff Concession Instrument No. 0618424, enacted in 2007 under the Customs Act 1901, addresses the issue of providing tariff concessions for specific imported goods. This instrument allows for a reduced rate of customs duty on certain goods that do not have substitutable products produced in Australia, thereby encouraging trade and supporting industries where local production does not exist. The Customs Act 1901, administered by the Parliament of Australia, facilitates the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs, who assesses applications against core criteria to determine eligibility for tariff concessions. The objective of this legislation is to ensure that the importation of certain goods can occur at a lower duty rate, thereby benefiting importers and potentially stimulating demand for these goods within the Australian market.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the creation and application of Tariff Concession Orders (TCOs) which are issued by the Chief Executive Officer of Customs. These orders apply to specific goods for which an application has been made, provided the goods do not fall within the exclusions listed in section 269SJ of the Act. The application process requires the applicant to demonstrate that no substitutable goods are produced in Australia, as outlined in section 269C. Once the Chief Executive Officer is satisfied that the application meets the core criteria, a written TCO is issued, which specifies the goods and the applicable tariff concession, as stipulated in Schedule 4 of the Customs Tariff Act 1995. The instrument in question, TCO No. 0618424, pertains to certain security gates and/or booths and came into force on 10 November 2006, the date the application was lodged. The TCO exempts these goods from the usual customs duty, which is otherwise 5%, and imposes no liabilities on any person, while potentially benefiting importers who may apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on specified goods (s 269F). Any person may apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO (s 269C). If the CEO determines that the application meets the core criteria—that is, no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged—the CEO must then issue a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (s 269P(3)). In this instance, Instrument TCO No 0618424, issued on 2 February 2007, applies to certain security gates and/or booths, declaring them to be subject to item 50 of Schedule 4 to the Tariff, with a rate of duty of free, down from the general rate of 5%.
The obligations imposed by the Act on the parties involved are primarily centred on the application process and the CEO's duty to evaluate and act on the application. Once an application for a TCO is received and deemed valid, the CEO must publish a notice in the Gazette, inviting submissions from any person who may have reasons against the making of the TCO (s 269K(1)). The CEO in this case did not receive any submissions. The Act also stipulates that the rights of a person (other than the Commonwealth) are not adversely affected by the TCO, and no liabilities are imposed on any person in respect of actions taken before the TCO's effective date (s 269S(1)). Importers, however, will benefit from the rights conferred by the TCO, including the ability to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (Reg 126(1)(r)).
In terms of breaches and penalties, the Act does not explicitly state any specific offences, penalties, or civil/criminal consequences for failure to comply with the provisions of a TCO or the application process. However, general compliance with the Customs Act 1901 is expected, and non-compliance with the Act or Regulations could lead to penalties such as fines or other civil and criminal sanctions as outlined in other sections of the Act. It is essential for parties to adhere to the procedural requirements and declarations made under a TCO to avoid any potential legal repercussions.