EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701959
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.
Sumikin Bussan Oceania Pty Ltd applied for a TCO in respect of certain tubes on 7 February 2007.
Instrument
TCO No 0701959 was made on 20 April 2007. It declares that those certain tubes 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. 0701959 is taken to have come into force on 7 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 Tariff Concession Instrument No. 0701959, enacted under the Customs Act 1901, aims to address the issue of providing tariff concessions for specific goods by allowing for a lower rate of customs duty for these goods, provided they meet certain criteria. This instrument was introduced to ensure that the application of tariff concessions aligns with the broader economic policy objectives of the government, including fostering fair trade practices and supporting industries by reducing import costs. The Customs Act 1901, as amended, empowers the Chief Executive Officer of Customs to make such tariff concession orders, subject to satisfying specific conditions outlined in the Act, such as the absence of substitutable goods produced in Australia. This legislative instrument was brought into force on 7 February 2007, the date the application for the tariff concession was lodged, and does not retroactively affect the rights or impose any liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the process through which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. The Act applies to individuals or entities that seek tariff concessions for imported goods, ensuring these goods are not substitutes for products that are domestically manufactured. The geographic scope of this Act is national, as it pertains to the Commonwealth of Australia and its customs duties. The application for a TCO must meet core criteria, including the absence of substitutable goods produced in Australia in the ordinary course of business. Certain goods are excluded from TCO eligibility, as specified in section 269SJ of the Act. The application process involves a public notice period for submissions, although no submissions were received in the case of TCO No. 0701959. This particular TCO, which concerns specific tubes, came into effect on the date the application was lodged, 7 February 2007, and benefits importers by reducing the duty rate from the general 5% to 0%. The TCO does not affect pre-existing rights or impose any new liabilities on persons other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0701959, made under the Customs Act 1901, pertains to the granting of a Tariff Concession Order (TCO) for specific tubes. Section 269F of the Act allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO. If the CEO determines that the application does not involve goods specified in section 269SJ and that it meets the core criteria as outlined in section 269C, the CEO is required to issue a TCO. Section 269P(3) specifies that a TCO must declare the goods to which a particular item in the Customs Tariff Act 1995 applies, provided the CEO is satisfied that no substitutable goods are produced in Australia.
The obligations imposed by the Act on the CEO include ensuring that any application for a TCO is assessed against the criteria set out in sections 269C and 269SJ. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties if the application is accepted as valid, as stipulated in section 269K(1). If no submissions are received, the CEO proceeds to issue the TCO. The TCO in this case, Instrument No. 0701959, was issued on 20 April 2007, following the application by Sumikin Bussan Oceania Pty Ltd on 7 February 2007. The TCO was effective from the date the application was lodged, as per subsection 269S(1).
Failure to comply with the requirements of the Customs Act 1901 can result in civil and criminal consequences. The Act does not specify particular offences or penalties for failing to adhere to the TCO provisions. However, general penalties under the Customs Act include fines and imprisonment for breaches of customs regulations. The exact penalties for specific breaches would be determined by the court, taking into account the nature and severity of the offence. The TCO itself does not impose any liabilities on individuals or entities, except for the Commonwealth, and it does not affect the rights of any person regarding actions taken before the TCO's effective date.