EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619470
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.
Placard Pty Ltd applied for a TCO in respect of certain thermal transfer ribbons on 7 December 2006.
Instrument
TCO No 0619470 was made on 2 March 2007. It declares that those certain thermal transfer 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. 0619470 is taken to have come into force on 7 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 was enacted by the Australian Parliament to regulate the customs and excise duties and to administer those duties. It established the framework for tariff concession orders, which allow for a lower rate of customs duty on specified goods. This mechanism was introduced to address the problem of ensuring that Australian industries remain competitive by reducing the duty burden on certain imported goods where no domestic equivalent exists. The Tariff Concession Instrument No. 0619470, made on 2 March 2007, exemplifies this approach. Placard Pty Ltd applied for a tariff concession order for certain thermal transfer ribbons, and the Chief Executive Officer of Customs granted the order after confirming that no substitutable goods were produced in Australia, thus allowing for a duty reduction from 5% to 0%. This instrument aims to support the policy objective of fostering a competitive environment for Australian industries by facilitating the import of necessary goods at a reduced customs duty rate.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders provide a lower rate of customs duty on specified goods, provided certain conditions are met. Specifically, an applicant must demonstrate that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. The TCO applies to goods identified in the application and is effective from the date the application was made. This Act applies to entities and individuals involved in the importation of goods that seek to benefit from reduced duty rates through a TCO. The geographic scope of the Act is national, operating under the authority of the Commonwealth. However, the Act explicitly excludes certain goods from eligibility, as outlined in section 269SJ. Additionally, the application process involves public consultation, where interested parties can submit objections to the CEO, although no such submissions were made for this particular TCO. The application of the Act can be further refined through subordinate instruments, allowing for detailed regulation of the tariff concession scheme.
Key Provisions
The Tariff Concession Instrument No. 0619470 under the Customs Act 1901 operates by allowing the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCO) for specific goods (section 269F). These TCOs lower the customs duty on the specified goods, provided the application meets certain criteria. The key provision under section 269C states that an application for a TCO is valid if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This is further elaborated in section 269B, which defines "goods produced in Australia" and "ordinary course of business," and section 269D, which defines "substitutable goods" as those that can be used in the same way as the goods in question. If the CEO determines that these criteria are met, they must issue a written order declaring the specified goods to be subject to a lower rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)).
The obligations imposed by the Act on the parties involved primarily revolve around the application process and the conditions for issuing a TCO. The CEO has the responsibility to assess applications to ensure they meet the core criteria outlined in the Act. This involves verifying that no substitutable goods were produced in Australia at the time the application was lodged. Additionally, once an application is accepted as valid, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections or reasons why the TCO should not be granted (subsection 269K(1)). This transparency ensures that the decision-making process is open and accountable.
Failure to comply with the provisions of the Customs Act 1901 may lead to various consequences. While the Act does not explicitly list offences, the implications of not adhering to the statutory requirements could result in the CEO not issuing a TCO when it should have been granted, potentially leading to higher customs duties on the specified goods. The penalties for such non-compliance are not explicitly stated in the Act but could involve legal challenges or administrative actions to rectify the non-compliance. Additionally, the Act ensures that the rights of importers are protected, as they may apply for a refund of duty on goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations.