EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701687
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.
Protube Asia Pty Ltd applied for a TCO in respect of certain saw blades on 31 January 2007.
Instrument
TCO No 0701687 was made on 04 June 2007. It declares that those certain saw blades 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. 0701687 is taken to have come into force on 31 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. 0701687, enacted in 2007 under the Customs Act 1901, addresses the need for facilitating trade by providing tariff concessions on specific goods. This instrument was introduced to streamline the process through which businesses can apply for reduced customs duty rates on goods that are not produced domestically, thereby enhancing competitiveness and economic efficiency. The Customs Act 1901 provides the legislative framework allowing the Chief Executive Officer of Customs to make such Tariff Concession Orders (TCOs) upon meeting certain criteria, such as the absence of substitutable goods produced in Australia. The policy objective is to support Australian businesses by reducing the cost of importing specific goods, thereby encouraging trade and economic growth. The instrument does not impose any new liabilities on individuals or entities, and the rights of importers are positively affected by enabling duty refunds on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0701687, made under the Customs Act 1901, applies to the specific case of certain saw blades for which Protube Asia Pty Ltd made an application on 31 January 2007. The instrument pertains to the imposition of tariff concessions on these goods, with the aim of facilitating their importation by providing a reduced or free customs duty rate. The scope of this legislation is confined to the goods specified in the application and is limited to the terms outlined in the Instrument, which was issued by the Chief Executive Officer of Customs following a determination that no substitutable goods were being produced in Australia at the time of the application. The Instrument itself is effective from the date the application was lodged, as per the provisions of the Customs Act, and does not retroactively affect any rights or impose liabilities prior to its issuance. There were no objections raised against the making of the Tariff Concession Order, indicating broad acceptance of the terms as proposed.
Geographically, the Act operates within the Commonwealth of Australia and applies to any entity or individual importing the specified goods into Australia, thereby impacting the importation process by reducing the customs duty rate from 5% to free. The legislation does not extend beyond the bounds of Australia, nor does it apply to goods that are explicitly excluded under section 269SJ of the Act. Any further application or extension of the Act's provisions is contingent upon additional orders or instruments made under the authority of the Customs Act, which may provide for broader or narrower applications as deemed necessary by the Chief Executive Officer of Customs.
Key Provisions
The Tariff Concession Order No. 0701687, issued under the Customs Act 1901 (the Act), provides tariff concessions for certain saw blades. Section 269P(3) of the Act mandates that if the Chief Executive Officer of Customs (the CEO) is satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria, they must make a written order declaring the goods subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff). In this instance, the CEO determined that no substitutable goods were produced in Australia, thus satisfying the core criteria as outlined in section 269C of the Act. Consequently, the TCO No. 0701687 declares that the certain saw blades are subject to item 50 of Schedule 4 to the Tariff, resulting in a duty-free rate.
The obligations imposed by this legislation on the parties involved include the requirement for applicants, such as Protube Asia Pty Ltd, to submit an application for a TCO to the CEO. The CEO, in turn, must assess whether the application meets the core criteria, as specified in section 269C of the Act. Once the CEO is satisfied that the application meets the criteria, they must make a written TCO. Additionally, as per section 269K(1) of the Act, the CEO is required to publish a notice in the Gazette inviting any person who considers there are reasons why the TCO should not be made to lodge a submission. In this case, the CEO published a notice inviting submissions but did not receive any.
Failure to comply with the provisions of the Customs Act 1901 may result in various consequences. The Act does not explicitly detail specific offences or penalties for non-compliance with the TCO process itself. However, breaches of other provisions within the Customs Act 1901 or the Customs Regulations 1993 may incur penalties. For example, section 239 of the Customs Act 1901 provides for penalties for providing false or misleading information in connection with an application for a TCO, which can result in fines of up to $22,200 for individuals and $111,000 for corporations. Furthermore, section 241 of the Act stipulates that any person who contravenes a provision of the Act may be liable for a penalty of up to $11,100 for individuals and $55,500 for corporations, in addition to potential criminal charges. These penalties underscore the importance of adherence to the legislative requirements set forth by the Customs Act 1901.