EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619680
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.
Hester Holdings Pty Ltd applied for a TCO in respect of certain saws on 12 December 2006.
Instrument
TCO No 0619680 was made on 9 March 2007. It declares that those certain saws 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. 0619680 is taken to have come into force on 12 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 Australian Parliament, establishes a framework for the administration of customs duties, including the provision for Tariff Concession Orders (TCOs). This legislative instrument addresses the gap in the tariff regime by allowing the Chief Executive Officer of Customs to reduce or eliminate customs duties on specific imported goods under certain conditions. This was introduced to promote fair competition and support Australian industries by ensuring that imported goods do not compete unfairly with domestically produced goods. The explanatory statement for Tariff Concession Instrument No. 0619680, which was made on 9 March 2007, indicates that Hester Holdings Pty Ltd successfully applied for a TCO on certain saws. The concession was granted as no substitutable goods were produced in Australia at the time, and the application process involved publishing a notice in the Gazette with no objections received. The tariff concession came into effect on the date the application was lodged, 12 December 2006, and it benefits importers by allowing them to claim refunds for duties paid on the specified goods since that date.
Scope and Application
The Customs Act 1901 provides a framework for the administration of customs duties, including provisions for Tariff Concession Orders (TCOs) that may lower the duty on specific goods. The Act applies to persons or entities applying for a TCO on goods, as well as the Chief Executive Officer of Customs who must assess and decide on such applications. The scope of the Act encompasses the goods that are the subject of the TCO applications, which must be goods that are not specified in section 269SJ of the Act as ineligible for such concessions. The Act applies on a national level, as it is a Commonwealth Act, and its reach is consistent across all states and territories of Australia. The Act allows for certain exclusions, notably excluding goods specified in section 269SJ from being subject to a TCO. Additionally, the Act may extend its application through subordinate instruments such as the Customs Tariff Act 1995, which includes the Tariff Schedules that specify duty rates. For instance, Tariff Concession Order No. 0619680 pertains to certain saws, which under normal circumstances attract a duty rate of 5%, but have a reduced rate of 0% as per the order.
Key Provisions
The key provisions of the Tariff Concession Order No. 0619680, as outlined in the Customs Act 1901, primarily revolve around the application process for tariff concessions and the conditions under which such concessions can be granted. Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) for specific goods. This process is governed by section 269C, which stipulates that the application meets the core criteria if, on the day of application, no substitutable goods were produced in Australia in the ordinary course of business (section 269E). Section 269D defines "goods produced in Australia," and section 269B defines "ordinary course of business" and "substitutable goods." If the CEO is satisfied that the application meets these criteria, they must issue a written order, as per section 269P(3), declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
Under this legislation, the CEO has several obligations and requirements. Firstly, upon receiving a valid TCO application, the CEO must publish a notice in the Gazette inviting any interested party to submit reasons why the TCO should not be granted, as stipulated in section 269K(1). In this case, the CEO did not receive any submissions. Furthermore, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the date of registration, as per section 269S(1). The commencement date of the TCO is the same as the date of the application, meaning that the TCO No. 0619680 is considered to have come into force on 12 December 2006.
The legislation also outlines specific consequences for breaches of its provisions. While the explanatory statement does not detail specific offences or penalties, it is important to note that under Australian law, breaches of customs regulations can result in both civil and criminal penalties. For example, under section 286 of the Customs Act 1901, persons found guilty of certain offences can face substantial fines and imprisonment. However, the specific penalties for breaching this particular TCO are not explicitly stated in the provided text. Nevertheless, it is clear that non-compliance with the terms and conditions of the TCO could potentially lead to legal repercussions for the involved parties.