EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0700516
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.
All Rubber Pty Ltd applied for a TCO in respect of certain blocks and/or panels and/or slabs on 9 January 2007.
Instrument
TCO No 0700516 was made on 10 April 2007. It declares that those certain blocks and/or panels and/or slabs 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 10%. 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. 0700516 is taken to have come into force on 9 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 Tariff Concession Instrument No. 0700516, enacted in 2007, amends the Customs Act 1901 to address the issue of providing tariff concessions for certain imported goods under specific conditions. This legislative instrument was introduced by the Parliament of Australia to facilitate a more streamlined and beneficial customs duty process for businesses importing goods not produced domestically, thereby supporting trade and economic efficiency. The policy objective is to ensure that when no substitutable goods are produced in Australia, importers can benefit from reduced customs duty rates, as evidenced by Tariff Concession Order No. 0700516 which lowered the duty on certain blocks, panels, and slabs from 10% to 0%. This legislative change aims to provide clarity and support to businesses by ensuring they are not disadvantaged by retrospective application of new tariff rates.
Scope and Application
The Customs Act 1901, specifically Part XVA, pertains to Tariff Concession Orders (TCOs) which are applicable to goods that benefit from a reduced rate of customs duty. The Act allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for specific goods, provided these goods are not listed in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. A TCO application meets the core criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. The CEO must then make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This legislative framework facilitates tariff concessions for eligible imported goods, offering economic benefits to importers. The scope of the Act is national, impacting all importers across Australia by providing a mechanism to adjust customs duties in certain circumstances. The Act does not specify exclusions beyond those in section 269SJ, but it does clarify that the rights of non-Commonwealth entities are protected, and the TCO does not impose any liabilities on persons for actions taken prior to the TCO's registration.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0700516 are sections 269C, 269F, 269K, and 269S, among others, within the Customs Act 1901 (section 269C). These sections set out the criteria for making a Tariff Concession Order (TCO) and the process by which the Chief Executive Officer of Customs (CEO) must consider and make such orders. Under section 269F, a person can apply to the CEO for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the application meets the core criteria in section 269C, the CEO must make a written order declaring that the goods are subject to a reduced rate of customs duty, as specified in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes certain obligations on the parties involved. For instance, when a person applies for a TCO, they must ensure their application is not in respect of goods that are ineligible under section 269SJ. Once the CEO accepts the application as valid, they must publish a notice in the Gazette (section 269K), inviting any person who might oppose the TCO to submit their reasons. If no submissions are received, the CEO proceeds to make the TCO based on the application. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO's effective date (section 269S).
The Act does not explicitly detail offences, penalties, or civil/criminal consequences for breaching its provisions concerning TCOs. However, any failure to comply with the requirements for making or applying for a TCO might result in the order being contested or not granted. The general framework of the Customs Act 1901 would apply for any breaches related to customs duties and other obligations, which could potentially include fines or other civil penalties as prescribed by other sections of the Act. However, no specific maximum penalties are mentioned in the explanatory statement regarding TCOs.