EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619255
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.
Region 4 Pty Ltd applied for a TCO in respect of certain thermal ribbons on 1 December 2006.
Instrument
TCO No 0619255 was made on 2 March 2007. It declares that those certain thermal ribbons 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 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. 0619255 is taken to have come into force on 1 December 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, facilitates the application of tariff concession orders (TCOs) to lower customs duties on certain imported goods. These TCOs are designed to address economic disparities by ensuring that Australian consumers and businesses have access to competitively priced goods, particularly when locally produced alternatives are not available or are prohibitively expensive. The Act enables the Chief Executive Officer of Customs to implement TCOs, provided that the application meets specific criteria, including the absence of substitutable goods produced in Australia. The Explanatory Statement for Tariff Concession Instrument No. 0619255, issued on 2 March 2007, details a specific instance where Region 4 Pty Ltd successfully applied for a TCO on certain thermal ribbons. This TCO, which came into effect on 1 December 2006, lowered the customs duty from 5% to 0%, thereby promoting fair trade practices and protecting the interests of Australian importers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This legislation applies to individuals and entities seeking to import goods into Australia that qualify for reduced customs duty rates. The Act facilitates the application process for tariff concessions, provided the goods in question do not fall under the restricted categories outlined in section 269SJ. If an applicant meets the core criteria, as defined in section 269C, the CEO must issue a TCO. For instance, TCO No. 0619255, made on 2 March 2007, applies to certain thermal ribbons, reducing their duty rate from 5% to 0% as of 1 December 2006. The application of this Act is national, with the CEO’s decision being binding across Australia. Importantly, the Act ensures that any person's rights as of the date of the TCO registration are protected, preventing any disadvantage or imposition of new liabilities for actions taken prior to the TCO's effective date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, provides the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). A TCO allows for a lower rate of customs duty on certain goods, provided the application meets the core criteria (s 269C). An application for a TCO can be submitted by any person, and if the CEO determines that it pertains to goods not excluded by section 269SJ and meets the criteria, a TCO can be issued (s 269P(3)). TCO No. 0619255, issued on 2 March 2007, declared that certain thermal ribbons are subject to a 0% duty rate, down from the general rate of 5%, as the CEO was satisfied that no substitutable goods were produced in Australia (s 269D, s 269E).
The Act imposes several obligations on the parties involved. The CEO must ensure that any TCO application not pertaining to excluded goods meets the core criteria before issuing a TCO. This includes verifying that no substitutable goods were produced in Australia on the day the application was lodged (s 269C). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who may have reasons to oppose the TCO (s 269K(1)). TCO No. 0619255 was made without any opposition submissions.
The Act also outlines potential consequences for non-compliance. Although the Act does not explicitly state civil or criminal penalties for breaches, the failure to adhere to the specified criteria for TCO applications could result in the CEO's decision being challenged in court, potentially leading to the TCO being revoked. Moreover, if a TCO is found to have been improperly issued, it may be subject to judicial review, and any reliance on the TCO could result in financial liabilities for the affected parties. The Act ensures that the rights of individuals, excluding the Commonwealth, are protected and that no liabilities are imposed retroactively (s 269S(1)).