EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701551
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.
Otter Group Pty Ltd applied for a TCO in respect of certain nails and/or brads and/or tacks and/or fencing staples and/or clouts on 29 January 2007.
Instrument
TCO No 0701551 was made on 20 April 2007. It declares that those certain nails and/or brads and/or tacks and/or fencing staples and/or clouts 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. 0701551 is taken to have come into force on 29 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 Commonwealth Parliament, establishes a framework for the administration of customs and excise duties in Australia. It includes provisions for the creation of Tariff Concession Orders (TCOs), which can be applied for by persons seeking a reduced rate of customs duty on specific goods. The Tariff Concession Instrument No. 0701551 was introduced to address the application by Otter Group Pty Ltd for a TCO on certain types of nails, brads, tacks, fencing staples, and clouts. The policy objective of the Act in this context is to facilitate the reduction of customs duties on goods that are not substitutable by Australian-produced alternatives, thus encouraging the import of these goods. The Tariff Concession Instrument No. 0701551 was made on 20 April 2007 and came into effect on 29 January 2007, the date on which the application was lodged. The instrument declares that the specified goods are subject to a zero rate of customs duty, as the CEO determined that no substitutable goods were produced in Australia at the time the application was made.
Scope and Application
The Customs Act 1901, through the Tariff Concession Instrument No. 0701551, applies to any person who may apply for a Tariff Concession Order (TCO) for goods on which customs duty is payable. Specifically, this Act allows for the application of lower rates of customs duty on goods that are the subject of a TCO, provided the goods are not specified in section 269SJ of the Act and the application meets the core criteria set out in section 269C. The Act applies to both individuals and entities, such as Otter Group Pty Ltd, who have applied for such concessions. This legislation operates on a national level under the Commonwealth jurisdiction and applies to goods that are imported into Australia. The scope of this Act extends to ensuring that the goods subject to the TCO are not substitutable by goods produced in Australia in the ordinary course of business, as defined in sections 269D, 269E, and 269F. The Act does not disadvantage any person, including importers, by affecting their rights or imposing liabilities for actions taken before the registration of the TCO. The instrument can also be extended or restricted through subordinate instruments, although no such extensions or restrictions are mentioned in this particular context.
Key Provisions
The primary operative sections of the Tariff Concession Order No. 0701551 (TCO) under the Customs Act 1901 include sections 269C, 269B, and 269P(3) (sections referenced in parentheses). Section 269C provides that a TCO application meets the core criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B defines key terms such as 'goods produced in Australia,' 'ordinary course of business,' and'substitutable goods.' Finally, section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, the CEO must make a written order declaring that the goods the subject of the TCO application are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The Act imposes certain obligations on the parties involved. For example, under section 269F, 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, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria as outlined in section 269C. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. If no submissions are received, the CEO proceeds to make the TCO.
Any breaches of the provisions outlined in the Act can result in various penalties and consequences. While the explanatory statement does not specify detailed penalties, breaches of the Customs Act 1901 generally can lead to civil or criminal penalties. Civil penalties may include fines, while criminal penalties can result in imprisonment, depending on the severity of the breach. The maximum penalties would be determined by the specific provisions of the Customs Act 1901 and the nature of the breach.