EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701602
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.
Silent Gliss Pty Ltd applied for a TCO in respect of certain curtain track motors on 30 January 2007.
Instrument
TCO No 0701602 was made on 20 April 2007. It declares that those certain curtain track motors 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 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. 0701602 is taken to have come into force on 30 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. 0701602 was enacted in 2007 under the Customs Act 1901, designed to address the need for tariff concessions on specific imported goods, thereby facilitating trade and economic activity by reducing customs duties. This instrument was introduced by the Chief Executive Officer of Customs, following an application by Silent Gliss Pty Ltd for tariff concessions on certain curtain track motors. The objective of this legislation is to provide a mechanism for lowering customs duty on goods for which no substitutable products are produced domestically, thus encouraging imports and potentially stimulating economic growth through reduced costs and increased market competition. The Customs Act 1901 outlines the process and criteria for such tariff concessions, ensuring that they are applied fairly and transparently.
Scope and Application
The Tariff Concession Instrument No. 0701602 applies to the specific goods, namely certain curtain track motors, as identified in the application by Silent Gliss Pty Ltd. The instrument is grounded in Part XVA of the Customs Act 1901, which governs the process for making Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The Act applies to any entity or individual seeking a tariff concession for goods that meet the specified criteria, ensuring that the goods are not substitutable by any products manufactured within Australia. The geographic reach of this Act is national, given that it is a Commonwealth Act. Importantly, the Act excludes certain goods specified in section 269SJ, which cannot be the subject of a TCO. The application of the Act can be extended or restricted through subordinate instruments, but in this instance, the TCO directly pertains to the specified curtain track motors. The commencement of the TCO aligns with the date of the application, 30 January 2007, and ensures that no existing rights or liabilities are adversely affected for actions taken prior to this date.
Key Provisions
The Tariff Concession Instrument No. 0701602 primarily deals with the granting of tariff concessions for certain curtain track motors as per section 269F of the Customs Act 1901 (the Act). This instrument was made by the Chief Executive Officer of Customs (the CEO) in response to an application from Silent Gliss Pty Ltd on 30 January 2007. The instrument, effective from the date of application, applies a zero rate of duty on these specific goods, down from the general rate of 5% (section 269P(3)). The instrument declares that the curtain track motors in question are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the CEO in processing a tariff concession order (TCO) application. Firstly, the CEO must ensure that the application is not in respect of goods specified in section 269SJ, which lists goods that cannot be subject to a TCO (section 269F). Secondly, the CEO must determine if the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (sections 269C and 269P(3)). Substitutable goods are defined as those produced in Australia that could serve a similar use to the goods in question. Upon meeting these criteria, the CEO must issue a written TCO.
The Act also outlines the obligations for the CEO regarding the consultation process. Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on why the TCO should not be granted (subsection 269K(1)). In this case, the CEO did not receive any submissions opposing the TCO, which facilitated its approval.
Breaching the provisions of the Customs Act 1901 can result in significant consequences. While the explanatory statement does not detail specific offences or penalties related to the TCO process itself, general contraventions of the Act can lead to both civil and criminal penalties. Civil penalties can include fines up to a maximum of $22,200 for individuals and $111,000 for bodies corporate, depending on the severity and nature of the breach. Criminal penalties may also apply, potentially leading to imprisonment for up to five years, especially in cases of serious or repeated breaches. These penalties underscore the importance of compliance with the statutory requirements and obligations set forth in the Act.