EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618669
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.
Roland DG Australia Pty Limited applied for a TCO in respect of certain computer controlled vinyl cutters on 20 November 2006.
Instrument
TCO No 0618669 was made on 09 February 2007. It declares that those certain computer controlled vinyl cutters 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. 0618669 is taken to have come into force on 20 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 administration of customs and excise duties. The Act enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCO) under Part XVA, which offer reduced customs duty rates for specified goods. The Tariff Concession Instrument No. 0618669, made in 2007, addresses the issue of applying concessional tariff rates for certain computer-controlled vinyl cutters by Roland DG Australia Pty Limited. This was enacted to ensure that these specific goods could benefit from a reduced duty rate, provided that no substitutable goods were produced in Australia at the time of the application. The policy objective here is to facilitate the import of goods that are not domestically produced, thereby supporting industry sectors that rely on imported components or machinery.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which apply lower rates of customs duty to certain goods. This act applies to any individual or entity wishing to import goods that could potentially benefit from a TCO, focusing on those who can demonstrate that no substitutable goods are produced in Australia in the ordinary course of business. The TCO mechanism is jurisdictional under the Commonwealth, with its application extending across Australia. The scope of this legislation does not include goods specified in section 269SJ of the Act, which outlines those ineligible for tariff concessions. Additionally, the CEO must ensure that the application meets the core criteria as outlined in sections 269C, 269B, and 269D of the Act, concerning the production of goods in Australia, the ordinary course of business, and the definition of substitutable goods, respectively. The application of the Act may also be extended or modified through subordinate instruments, ensuring flexibility in addressing various import scenarios.
Key Provisions
The Customs Act 1901, particularly Part XVA, outlines the procedure for Tariff Concession Orders (TCOs), which are granted by the Chief Executive Officer of Customs (CEO) to lower customs duties on specific goods. Section 269F allows a person to apply for a TCO, provided the goods are not listed in section 269SJ, which details goods ineligible for TCOs. To meet the core criteria, as stipulated in section 269C, the CEO must be convinced that no substitutable goods were produced in Australia at the time of application, with 'substitutable goods' defined in section 269D and 'ordinary course of business' in section 269E. Once the CEO determines that the application fulfills these criteria, a written TCO must be issued under section 269P(3), specifying the reduced duty rate applicable to the goods.
The obligations under this legislation require applicants to ensure their goods meet the specified criteria for TCOs. The CEO must assess the application against these criteria and publish a notice in the Gazette inviting submissions from interested parties, as per section 269K(1). In this case, no submissions were received. The TCO takes effect from the date the application was lodged, according to section 269S(1). It is important to note that the TCO does not affect the rights of any person other than the Commonwealth or impose any liabilities on them for actions taken before the registration date, as clarified in the explanatory statement.
Should any party breach the provisions of the Customs Act 1901 concerning TCOs, they may face civil or criminal penalties. The Act does not specify particular penalties but generally allows for fines and imprisonment for breaches. For instance, section 160 of the Customs Act provides for penalties for false statements or fraudulent conduct, which may include fines of up to $11,000 or imprisonment for up to two years, or both. These penalties reflect the seriousness of non-compliance and the need to maintain the integrity of the customs duty system.