EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618622
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.
Super Cheap Auto Pty Ltd applied for a TCO in respect of certain rubber car mats on 17 November 2006.
Instrument
TCO No 0618622 was made on 09 February 2007. It declares that those certain rubber 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 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. 0618622 is taken to have come into force on 09 February 2007 17 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 Parliament of Australia, establishes the framework for the regulation of customs and excise duties. Among its provisions, Part XVA of the Act introduces a scheme whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs, allowing for lower customs duty rates on specified goods. The Act was introduced to address the need for streamlined customs duty applications and concessions, enhancing trade efficiency and facilitating business operations. In the case of Tariff Concession Instrument No. 0618622, Super Cheap Auto Pty Ltd successfully applied for a TCO on 17 November 2006, which was subsequently issued on 09 February 2007. This specific instrument grants a tariff concession on certain rubber car mats, reducing the general duty rate from 10% to free, provided no substitutable goods were produced in Australia at the time of the application. The instrument's policy objective is to support trade by reducing the cost of imported goods, thus benefiting importers and potentially consumers.
Scope and Application
The Tariff Concession Instrument No. 0618622, made under the Customs Act 1901, applies to the specific goods for which an application has been made, in this case, certain rubber car mats, and the entities or persons who import these goods. The instrument is concerned with the concession of customs duty on these goods, reducing the duty from the general rate of 10% to free, provided that no substitutable goods were produced in Australia on the day the application was lodged. The Act's application is national, given its Commonwealth nature, and it extends to all entities and individuals involved in the importation of the specified goods within Australia. Any exclusions are governed by section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO of Customs has the discretion to make further orders or revoke existing orders under the Act, thereby extending or restricting the application through subordinate instruments.
Key Provisions
The Customs Act 1901 (the Act) facilitates the creation of Tariff Concession Orders (TCOs) under Part XVA, which allows for lower rates of customs duty on specific goods. If a person wishes to apply for a TCO, they must do so to the Chief Executive Officer of Customs (CEO) as per section 269F. The CEO must then determine if the application meets the core criteria set out in section 269C, which includes a condition that no substitutable goods were produced in Australia in the ordinary course of business as per section 269D and 269E. If the application is approved, the CEO must issue a written order as per section 269P(3).
For TCO No. 0618622, made on 09 February 2007, the CEO declared that certain rubber car mats are subject to the concessions outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995. This TCO stipulates that the general rate of duty, which is 10%, is reduced to free for these goods. Super Cheap Auto Pty Ltd applied for this TCO on 17 November 2006, and it came into force on that date. The CEO is required by subsection 269K(1) of the Act to publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made. In this case, no submissions were received.
The obligations imposed by the Act on parties include the requirement for the CEO to assess whether an application meets the core criteria and to issue a written order if it does. The Act also mandates that the CEO must publish a notice in the Gazette inviting objections to the TCO. Importers of the affected goods can apply for a refund of duty under paragraph 126(1)(r) of the Regulations, which takes effect from the date the TCO is deemed to have come into force. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and it imposes no liabilities on any person.
The Act does not specify any particular offences or penalties for breaches related to TCOs. However, general provisions within the Customs Act 1901 and the Customs Tariff Act 1995 may apply to breaches of customs regulations. These could include fines and imprisonment for serious breaches. The specific penalties would depend on the nature and severity of the breach, but the Act aims to ensure compliance with its provisions to maintain the integrity of the customs duty system.