EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701451
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.
Portugal Cork Co Pty Ltd applied for a TCO in respect of certain agglomerated cork in rolls on 23 January 2007.
Instrument
TCO No 0701451 was made on 13 April 2007. It declares that those certain agglomerated cork in rolls areis a 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. 0701451 is taken to have come into force on 23 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. 0701451, enacted in 2007, provides a mechanism under the Customs Act 1901 to reduce the rate of customs duty on specific goods through the issuance of a Tariff Concession Order (TCO) by the Chief Executive Officer of Customs. This legislation was introduced to address the gap in tariff concessions for goods that are not produced domestically and where no substitutable goods are available in Australia. The policy objective, as outlined in the explanatory statement, is to provide tariff relief to importers by lowering the customs duty on certain imported goods, thereby promoting fair competition and economic efficiency.
The Customs Act 1901, enacted by the Parliament of Australia, authorises the CEO to consider applications for TCOs if the goods in question are not specified in the restricted list and meet the core criteria, including the absence of substitutable domestic production. The Tariff Concession Instrument No. 0701451, specifically for certain agglomerated cork in rolls, was implemented following an application by Portugal Cork Co Pty Ltd. The CEO was satisfied that no substitutable goods were produced in Australia, leading to the concession of a 5% duty rate to zero, effective from 23 January 2007. This legislative measure ensures that importers of these goods can apply for duty refunds and that no existing rights or liabilities are adversely affected.
Scope and Application
The Tariff Concession Instrument No. 0701451 under the Customs Act 1901 applies to goods that are the subject of a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs (CEO) in relation to certain agglomerated cork in rolls. This legislation specifically targets those who import such goods, providing them with a lower rate of customs duty as specified in the TCO. The Act applies to the Commonwealth and operates nationally, affecting the rights of importers by allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. The TCO ensures that no person, other than the Commonwealth, is disadvantaged or imposed liabilities in respect of anything done or omitted to be done before the date of registration. Exclusions from the application of this Act include goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The CEO's decision to grant a TCO is based on whether the application meets the core criteria, such as the absence of substitutable goods produced in Australia at the time of the application.
Key Provisions
The Tariff Concession Instrument No. 0701451 pertains to the Customs Act 1901, specifically targeting Tariff Concession Orders (TCOs) under section 269F (1). An applicant, such as Portugal Cork Co Pty Ltd, may apply for a TCO in respect of goods, in this case, certain agglomerated cork in rolls, to which a lower rate of customs duty applies. The instrument was made on 13 April 2007, declaring that these goods are subject to item 50 of Schedule 4 to the Tariff, with the rate of duty being free instead of the general 5%.
Under section 269C, for a TCO to be granted, the CEO must be satisfied that no substitutable goods were produced in Australia on the day the application was lodged, as defined by section 269D. The instrument states that no submissions were received in response to the notice published in the Gazette under section 269K(1), indicating no objections to the concession.
Obligations and requirements imposed by the Act on the parties involved include the necessity for the CEO to assess the application against the core criteria specified in section 269C, publish a notice in the Gazette inviting submissions, and, if satisfied, make a written order declaring the goods subject to the TCO. Importers of these goods can apply for a refund of duty under paragraph 126(1)(r) of the Regulations, starting from the day the TCO is deemed to have come into force.
The Act also outlines potential consequences for non-compliance. While specific offences and penalties are not detailed in the explanatory statement, breaches of customs regulations generally carry significant penalties under the Customs Act 1901. These may include fines and imprisonment, reflecting the seriousness with which customs legislation is enforced in Australia.