EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618514
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.
Road Gear Australasia Pty Ltd applied for a TCO in respect of certain car mats on 14 November 2006.
Instrument
TCO No 0618514 was made on 9 February 2007. It declares that those certain car mats 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 10%. 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. 0618514 is taken to have come into force on 14 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. 0618514, enacted on 9 February 2007, is a legislative instrument under the Customs Act 1901. It was introduced to address the need for tariff concessions on specific goods, in this instance, certain car mats, by reducing their customs duty from 10% to 0%. The instrument was created in response to an application by Road Gear Australasia Pty Ltd on 14 November 2006, which sought to lower the customs duty on certain car mats, as no substitutable goods were being produced in Australia at the time. The instrument was enacted by the Chief Executive Officer of Customs, who was satisfied that the application met the core criteria outlined in the Customs Act 1901. The primary policy objective of this instrument is to provide relief to importers by reducing the customs duty on specific goods, thereby facilitating trade and economic activity.
Scope and Application
The Customs Act 1901, through its Part XVA, enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs), which grant reduced customs duty rates on specified goods. These orders apply to any individual or entity seeking to import goods into Australia that meet the criteria for tariff concessions. The application process requires the applicant to demonstrate that no substitutable goods are produced in Australia at the time of application, as outlined in sections 269C, 269D, 269E, and 269F of the Act. Any goods specified in section 269SJ, which lists items that cannot be subject to a TCO, are excluded from this scheme. The geographic reach of this legislation is national, applying across all states and territories of Australia. The TCO No. 0618514, which was made on 9 February 2007, applies to certain car mats, granting them a duty rate of 0% instead of the general rate of 10%. The instrument came into force on 14 November 2006, the date the application was lodged, and does not retroactively affect any duties or liabilities incurred prior to this date. The TCO is subject to further regulation through subordinate instruments, ensuring its application aligns with broader trade policies and objectives.
Key Provisions
The main operative sections of the Customs Act 1901, particularly in relation to Tariff Concession Orders (TCOs), include sections 269F, 269C, 269B, and 269P. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application is deemed valid and meets the core criteria, as defined in sections 269C and 269B, the CEO must make a written order (TCO). Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must declare that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, resulting in a concession on the customs duty rate.
The Act imposes several obligations and requirements on parties involved in the TCO process. Firstly, the CEO must ensure that any TCO application is not for goods specified in section 269SJ, which are ineligible for a TCO. If the CEO is satisfied that the application meets the core criteria, they must make a TCO. Additionally, the CEO must publish a notice in the Gazette inviting any person to lodge a submission if they believe the TCO should not be made, as per subsection 269K(1). This ensures transparency and allows for any objections to be considered before a TCO is issued.
Breach of the conditions outlined in the Customs Act 1901 can lead to various consequences. Offences under this Act may include the unauthorised importation or exportation of goods, fraud, or misrepresentation in applications for TCOs. The penalties for these offences can be severe and may include both civil and criminal sanctions. Civil penalties could involve fines, while criminal penalties may include imprisonment, depending on the severity of the breach. The maximum penalties are not specified in the explanatory statement but are outlined in the relevant sections of the Act.
In summary, the Customs Act 1901 and its associated regulations provide a framework for the application and issuance of TCOs. The CEO must ensure that applications meet specific criteria and that any objections are considered before a TCO is made. Failure to comply with the Act’s provisions can result in significant penalties, underscoring the importance of adhering to the outlined procedures and obligations.