EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0700093
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.
W.W. Wedderburn Pty Limited applied for a TCO in respect of certain label printers and applicators on 03 January 2007.
Instrument
TCO No 0700093 was made on 16 March 2007. It declares that those certain label printers and applicators 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. 0700093 is taken to have come into force on 03 January 2007.
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 amended to introduce the scheme for Tariff Concession Orders (TCOs) under Part XVA, enabling the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty on specific goods through these orders. This legislation was enacted to address the gap in the duty system by allowing for tariff concessions where no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0700093 was introduced in 2007 by the Australian Government in response to an application from W.W. Wedderburn Pty Limited for tariff concessions on certain label printers and applicators. The policy objective is to facilitate the import of goods that are not domestically produced, thereby supporting industries that rely on imported materials or equipment. The instrument ensures that the rights of importers are protected and can benefit from duty refunds, while not imposing any new liabilities on other stakeholders.
Scope and Application
The Customs Act 1901, through Part XVA, governs the scheme for Tariff Concession Orders (TCOs) which can be applied for by any person and implemented by the Chief Executive Officer of Customs (CEO) for specific goods, provided they do not fall under the restricted category outlined in section 269SJ of the Act. The application of a TCO results in a reduced rate of customs duty for the specified goods, contingent upon the CEO's determination that no substitutable goods are produced in Australia at the time of application. The application process involves a public notice in the Gazette to allow interested parties to voice any objections, although in the case of TCO No. 0700093, no such submissions were received. This order, which came into force on the date the application was lodged, grants free tariff treatment to certain label printers and applicators by applying item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively lowering the duty from 5% to free. Importantly, the TCO does not retroactively affect any rights or liabilities, thus preserving the status quo for actions taken prior to its registration.
Key Provisions
The Tariff Concession Instrument No. 0700093 under the Customs Act 1901 (section 269P) provides a concession on customs duty for specific goods, in this case certain label printers and applicators. Section 269P(3) states that if the Chief Executive Officer (CEO) of Customs is satisfied that the application for a Tariff Concession Order (TCO) meets the core criteria, they must issue a written order. This particular TCO, No. 0700093, declares that the specified label printers and applicators are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, thereby applying a duty rate of free instead of the general rate of 5%.
The obligations imposed by the Act on parties applying for a TCO are outlined in section 269F, which allows a person to apply to the CEO for a TCO in respect of goods, provided the goods are not specified in section 269SJ. The CEO must then determine whether the application meets the core criteria as defined in section 269C, which requires that on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Additionally, section 269K(1) mandates that the CEO publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. In this case, no submissions were received.
Failure to comply with the requirements of the Customs Act 1901 may result in various consequences. While the explanatory statement does not specify any particular offences or penalties for breaching the Act, it is important to note that non-compliance with the regulations could potentially lead to civil or criminal penalties as stipulated in other sections of the Act or related legislation. The maximum penalties for such breaches could vary depending on the specific nature and severity of the offence.