EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701301
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.
Adaptaflex Pty Ltd applied for a TCO in respect of certain flexible nylon electricity conduits on 24 January 2007.
Instrument
TCO No 0701301 was made on 13 April 2007. It declares that those certain flexible nylon electricity conduits 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. 0701301 is taken to have come into force on 24 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, enacted by the Australian Parliament, provides the framework for the administration of customs and excise in Australia, including the imposition of duties on imported goods. This Act was introduced to streamline the process of applying for tariff concessions on specific goods, thereby addressing a gap in facilitating trade by reducing the customs duty burden on certain imported items. Part XVA of the Customs Act 1901 allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to specified goods, provided the application meets core criteria such as the absence of substitutable goods produced in Australia. The policy objective behind the introduction of TCOs is to support Australian industries by preventing the importation of goods that could substitute for those produced domestically, while also potentially enhancing the competitiveness of Australian businesses by lowering the duty on specific imported goods.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0701301, applies to any entity or individual seeking tariff concessions on imported goods under the specified conditions. The Act pertains specifically to goods that are not produced in Australia in the ordinary course of business and for which no substitutable goods are available domestically. The Chief Executive Officer of Customs (CEO) is authorised to make Tariff Concession Orders (TCOs) that reduce or eliminate customs duty on such goods, provided the application meets the core criteria set out in section 269C of the Act. This legislative framework is applicable across the Commonwealth of Australia, ensuring uniform treatment of tariff concessions nationwide. However, it is pertinent to note that certain goods, as outlined in section 269SJ of the Act, are excluded from eligibility for TCOs. The instrument also provides that the making of a TCO does not affect existing rights or impose new liabilities on individuals or entities other than the Commonwealth, safeguarding the interests of all stakeholders involved in the import process.
Key Provisions
The Tariff Concession Instrument No. 0701301, made under the Customs Act 1901, addresses the application and effect of a Tariff Concession Order (TCO) for specific goods. Section 269F (1) allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO if the goods in question do not fall under the exclusions specified in section 269SJ. If the CEO determines that the application meets the criteria set out in section 269C, which requires that no substitutable goods are produced in Australia at the time of application, the CEO is mandated to issue a TCO (section 269P(3)). The TCO in this case, Instrument TCO No. 0701301, was made on 13 April 2007, and it applies to certain flexible nylon electricity conduits, setting the duty rate at free, as opposed to the general rate of 5% (item 50 of Schedule 4 to the Customs Tariff Act 1995). This tariff concession came into effect on 24 January 2007, the date the application was lodged (subsection 269S(1)).
The Act imposes several obligations on the parties involved. Upon receiving a valid application for a TCO, the CEO must publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not be granted (subsection 269K(1)). The CEO must then consider these submissions before deciding whether to issue the TCO. In this instance, no submissions were received in response to the published notice, and the TCO was subsequently granted. Additionally, the Act ensures that the TCO does not affect the rights of any person, except the Commonwealth, as of the date of registration in a manner that disadvantages that person or imposes liabilities for actions taken prior to the registration (subsection 269S(3)).
Breaching the requirements set out in the Customs Act 1901 can lead to various penalties and consequences. While the explanatory statement does not detail specific offences or penalties for non-compliance with TCO provisions, general provisions in the Act outline potential penalties for breaches. For example, under the general penalties outlined in section 276, an individual found guilty of an offence against the Act may be subject to fines or imprisonment, depending on the severity of the offence. The maximum penalties can vary significantly, with serious offences potentially resulting in fines of up to $22,200 and/or imprisonment for up to five years, as stipulated in section 276 of the Act. The exact penalties depend on the specific nature of the breach and the circumstances surrounding it.