EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0700892
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.
Phoenix AG (Aust) Pty Ltd applied for a TCO in respect of certain segment sealing gaskets on 16 January 2007.
Instrument
TCO No 0700892 was made on 13 April 2007. It declares that those certain segment sealing gaskets 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. 0700892 is taken to have come into force on 16 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. 0700892 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific goods. This legislation was introduced to provide relief to businesses by reducing or eliminating customs duties on certain imported goods, provided they meet certain criteria and no suitable domestic alternatives are produced in Australia. The instrument was created to ensure that businesses can access essential goods at a reduced cost, which can help lower production costs and increase competitiveness. The Chief Executive Officer of Customs (CEO) is the enacting authority, empowered to make Tariff Concession Orders (TCOs) that declare certain imported goods as subject to a reduced or zero rate of duty, as long as they satisfy the core criteria set out in the Act. The CEO must consider applications for TCOs and, if satisfied that the application meets the criteria, issue a written order declaring the specified goods to which the prescribed tariff concession applies. This process ensures that the rights of importers are protected and can benefit from duty refunds on goods imported since the effective date of the TCO, without imposing any additional liabilities on individuals or entities.
Scope and Application
The Customs Act 1901 applies to individuals, companies, and entities engaged in the importation of goods into Australia, providing a framework for the regulation of customs duties and tariff concessions. Specifically, the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can apply to certain goods, effectively reducing their customs duty rates. This Act applies to any person or entity that imports goods into Australia and seeks to benefit from reduced duty rates through a TCO. The geographic reach of this legislation is national, as it applies across all states and territories of Australia. The Act excludes certain goods from being subject to a TCO, as specified in section 269SJ. The application process for a TCO involves meeting core criteria, such as the absence of substitutable goods produced in Australia at the time of the application. The Act allows for further details and conditions to be specified through subordinate instruments, expanding on its application and enforcement.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0700892 are sections 269C, 269F, and 269P of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO), which results in a lower rate of customs duty on certain goods. Section 269C specifies that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these core criteria, they must make a written order under section 269P(3) declaring that the goods in question are subject to a prescribed rate of duty in Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that any TCO application does not concern goods specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. The CEO must also determine if the application meets the core criteria outlined in section 269C. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as per section 269K(1). In the case of TCO No. 0700899, no submissions were received. Once a TCO is made, the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations.
Failure to comply with the requirements set out in the Customs Act 1901 can result in various penalties and consequences. While the specific penalties are not detailed in the explanatory statement, the Act generally allows for civil and criminal sanctions for breaches of its provisions. The maximum penalties can vary depending on the nature and severity of the offence. For example, fraudulent misrepresentation or concealment of information can lead to substantial fines and imprisonment. Similarly, non-compliance with the duty refund provisions could result in financial penalties and legal action to recover the unpaid duty. The precise penalties are determined by the relevant sections of the Customs Act and the accompanying regulations.
In summary, the Tariff Concession Instrument No. 0700892 provides for a lower rate of customs duty on certain segment sealing gaskets, subject to the core criteria outlined in the Customs Act 1901. The CEO must assess TCO applications, ensuring they meet the criteria and do not involve prohibited goods. Importers can benefit from duty refunds for goods imported since the TCO came into force. Breaches of the Act can lead to civil or criminal penalties, though specific penalties are not detailed in the explanatory statement.