EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619978
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.
XTek Limited applied for a TCO in respect of certain cyanoacrylate fuming cabinets on 19 December 2006.
Instrument
TCO No 0619978 was made on 09 March 2007. It declares that those certain cyanoacrylate fuming cabinets 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. 0619978 is taken to have come into force on 19 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, established a framework for imposing customs duties on imported goods. This Act provides the authority for the creation of Tariff Concession Orders (TCOs) under Part XVA, which allow for a lower rate of customs duty on specified goods, provided certain criteria are met. The primary issue that this legislative framework addresses is the need to provide tariff relief for imported goods that do not have Australian-made substitutes, thereby promoting trade and potentially reducing costs for businesses and consumers. Instrument No. 0619978, made under this Act, was introduced to provide tariff concessions for certain cyanoacrylate fuming cabinets, effective from 19 December 2006, after the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, meeting the core criteria outlined in the Act. The objective of this measure is to facilitate smoother trade operations and enhance economic efficiency by allowing duty-free importation of these specific goods.
Scope and Application
The Customs Act 1901, through its Part XVA, provides a framework for the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). This Act applies to any individual or entity that seeks to apply for a tariff concession in relation to specific goods, provided those goods are not excluded under section 269SJ of the Act. The application process mandates that the CEO must determine if no substitutable goods are produced in Australia at the time of the application, which is defined under sections 269C, 269D, and 269E. Once the CEO is satisfied that the application meets the core criteria, they are required to issue a written order that effectively reduces the customs duty on the specified goods. This concession applies nationally and takes effect from the date the application was lodged, as outlined in subsection 269S(1) of the Act. The TCO does not retroactively affect the rights of any person and does not impose any liabilities on individuals or entities for actions taken prior to the order's registration. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties, although in this instance, no objections were received.
Key Provisions
The Tariff Concession Instrument No. 0619978, under section 269P(3) of the Customs Act 1901, establishes a lower rate of customs duty for certain cyanoacrylate fuming cabinets. The instrument was issued after XTek Limited applied for a tariff concession order (TCO) on 19 December 2006. The Chief Executive Officer of Customs (CEO) determined that no substitutable goods were produced in Australia, satisfying the core criteria under section 269C of the Act. Consequently, the CEO issued the TCO, which specifies that the particular cyanoacrylate fuming cabinets are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free rate for these goods. The TCO took effect on the date of the application, 19 December 2006, under subsection 269S(1) of the Act.
The Act imposes specific obligations on the CEO, as outlined in sections 269F and 269K of the Customs Act 1901. When an application for a TCO is received, the CEO must assess whether it pertains to goods specified in section 269SJ, which cannot be subject to a TCO. If the application does not involve such goods, the CEO must determine if it meets the core criteria specified in section 269C. This involves verifying that no substitutable goods were produced in Australia in the ordinary course of business on the application date, as defined by sections 269D and 269E. Additionally, the CEO is required to publish a notice in the Gazette, inviting any interested party to lodge a submission opposing the TCO, as per subsection 269K(1). In this case, no submissions were received.
The Customs Act 1901 and associated regulations do not explicitly outline specific offences or penalties for breaches related to the issuance or application of a TCO. However, general provisions within the Act and related regulations may apply to non-compliance with customs duties and other related obligations. For instance, failure to comply with customs regulations could lead to penalties under the Crimes Act 1914 or other applicable laws, potentially resulting in fines or imprisonment. The TCO itself does not impose any liabilities on any person, and it does not affect the rights of individuals as at the date of registration, ensuring that no person (other than the Commonwealth) is disadvantaged or imposed liabilities for actions taken before the TCO's effective date.