EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701764
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.
Bruck Textiles Pty Ltd applied for a TCO in respect of certain pigments on 5 February 2007.
Instrument
TCO No 0701764 was made on 30 April 2007. It declares that those certain pigments 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. 0701764 is taken to have come into force on 5 February 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 was enacted to establish a comprehensive framework for the administration of customs duties and related matters in Australia. One of its key features is the provision for Tariff Concession Orders (TCOs), which are intended to address situations where goods are imported that cannot be substituted by Australian-produced alternatives. The Customs Act 1901 allows the Chief Executive Officer of Customs to issue these orders, which effectively reduce or eliminate customs duties on specified goods. This mechanism was introduced to support industries that may be vulnerable to competition from domestically produced goods, thereby encouraging the importation of goods that are not readily available within Australia. The primary objective is to facilitate trade and economic activity by ensuring that Australian consumers and businesses have access to a broader range of goods at reduced costs, thus fostering a competitive marketplace.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs may reduce customs duty rates on specified goods. An individual or entity can apply for a TCO if the goods in question are not listed in section 269SJ of the Act, which outlines ineligible items. A TCO is issued if the application meets the core criteria stipulated in section 269C of the Act, which requires that no substitutable goods are produced in Australia at the time of application. TCO No. 0701764, made on 30 April 2007, pertains to certain pigments and applies a zero per cent duty rate instead of the standard five per cent. The application process involves public notification in the Gazette, allowing objections to be raised, although no submissions were received for this particular TCO. The TCO’s effective date aligns with the application date, 5 February 2007, benefiting importers by allowing duty refunds from that date without imposing new liabilities.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0701764 under the Customs Act 1901 (section 269F) require that an application for a Tariff Concession Order (TCO) can be made to the Chief Executive Officer of Customs (CEO) for goods not listed in section 269SJ, provided that no substitutable goods are produced in Australia (section 269C). If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring the goods subject to the TCO (subsection 269P(3)).
The Act imposes specific obligations and requirements on the parties involved in the TCO process. For instance, the CEO must decide if an application meets the core criteria, which includes verifying that no substitutable goods are produced in Australia (section 269C). Additionally, the CEO is mandated to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). The CEO must also ensure that the rights of persons other than the Commonwealth are not disadvantaged by the TCO (subsection 269S(1)).
The legislation outlines various offences and penalties for breaches. While the explanatory statement does not specify maximum penalties, it is understood that breaches of the Customs Act 1901 can lead to civil and criminal consequences. These may include fines and imprisonment, depending on the nature and severity of the breach. The specific penalties would be determined in accordance with the relevant sections of the Customs Act and any applicable regulations.
In summary, the Tariff Concession Instrument No. 0701764 provides a mechanism for reducing customs duty on certain goods, provided they meet specific criteria. The CEO has the responsibility to assess applications and ensure compliance with the Act's requirements, while the rights of non-Commonwealth persons must be protected. Breaches of the Act can result in civil and criminal penalties, although the exact penalties are not detailed in the explanatory statement.