EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701304
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.
L E Whittaker & Sons Pty Ltd applied for a TCO in respect of certain hydration bladders on 24 January 2007.
Instrument
TCO No 0701304 was made on 20 April 2007. It declares that those certain hydration bladders 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. 0701304 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 Tariff Concession Instrument No. 0701304, enacted under the Customs Act 1901, was introduced to address the specific need for tariff concessions for certain goods, in this case hydration bladders, which were deemed not to have substitutable goods produced in Australia. This legislative instrument was brought into effect on 20 April 2007, establishing that these particular hydration bladders are subject to a duty-free rate as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995. The decision to enact this instrument was made by the Chief Executive Officer of Customs following an application from L E Whittaker & Sons Pty Ltd on 24 January 2007, after it was determined that the application met the core criteria specified under section 269C of the Act. The instrument does not disadvantage any person, and importers of the affected goods can apply for a refund of duty on goods imported since the effective date of the tariff concession.
Scope and Application
The Customs Act 1901, specifically through Part XVA, governs the scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This Act applies to persons and entities that may apply for a TCO in respect of goods, provided these goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The geographic reach of this legislation is national, as it is a Commonwealth Act, applying across Australia. The Act also delineates that if an application for a TCO meets the core criteria, including the absence of substitutable goods produced in Australia, the CEO is required to make a written order that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Any exclusions are explicitly stated, ensuring the rights of individuals and entities are protected, and no liabilities are imposed for actions prior to the order's registration. The application of the Act can be extended or restricted through subordinate instruments, as outlined in the explanatory statement.
Key Provisions
The main operative sections of this legislation revolve around the creation and implementation of Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). A TCO is a concession made by the Chief Executive Officer of Customs (CEO) to reduce or eliminate customs duty on certain goods. For a TCO to be considered, the CEO must first verify that the application does not pertain to goods specified in section 269SJ, which are ineligible for a TCO. If the application meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged (section 269C), the CEO must issue a written TCO. This written order declares the goods in question as subject to a particular tariff item specified in Schedule 4 of the Customs Tariff Act 1995.
The Customs Act 1901 imposes several obligations on the CEO and applicants for TCOs. The CEO must ensure that the application does not concern ineligible goods and that the application meets the core criteria, specifically that no substitutable goods were produced in Australia (section 269C). Once an application is deemed valid, the CEO is required to publish a notice in the Gazette, inviting any interested parties to lodge submissions opposing the TCO (subsection 269K(1)). Additionally, the CEO must make the TCO effective from the date the application was lodged (subsection 269S(1)). The applicant, in turn, must ensure that their application is valid and meets all stipulated criteria to qualify for a TCO. The CEO is obligated to respond to valid applications within the legislative framework.
In terms of consequences for non-compliance, the Customs Act 1901 does not explicitly outline specific offences or penalties for failing to comply with TCO requirements. However, any breaches of customs regulations generally fall under the broader customs legislation, where violations can lead to civil and criminal penalties. These may include fines, imprisonment, or both, depending on the severity and nature of the breach. For example, under the Crimes Act 1914, serious breaches of customs laws can result in penalties of up to 10 years imprisonment and/or substantial fines. It is essential for all parties involved to adhere to the requirements and obligations set forth in the Customs Act 1901 to avoid any potential legal repercussions.