EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702042
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.
Off Roads Imports Pty Ltd applied for a TCO in respect of certain hydration systems on 12 February 2007.
Instrument
TCO No 0702042 was made on 17 August 2007. It declares that those certain hydration systems 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. One submission objecting to the TCO application was received from Adventure One Pty Ltd.
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. 0702042 is taken to have come into force on 12 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, enacted by the Australian Parliament, provides for a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The Act aims to ensure that goods eligible for tariff concessions are not duplicated by local production. This legislative framework was introduced to address the gap in reducing customs duty on specific imported goods where there is no local production of substitutable goods, thereby promoting fair trade practices and potentially stimulating economic activity through access to cheaper imported goods. The Tariff Concession Instrument No. 0702042, issued on 17 August 2007, exemplifies this process, as it grants a tariff concession on certain hydration systems following an application by Off Roads Imports Pty Ltd, and after considering objections from interested parties. The policy objective is to provide tariff relief on goods where there is no local production of similar goods, thus facilitating competitive market conditions and potentially benefiting consumers.
Scope and Application
The Customs Act 1901, through its Tariff Concession Instrument No. 0702042, applies to any person or entity seeking tariff concessions on specific goods imported into Australia, provided the goods meet the criteria outlined in the Act. This Act specifically governs the process by which the Chief Executive Officer of Customs can make Tariff Concession Orders, reducing the customs duty on certain goods, as seen in the case of the hydration systems applied for by Off Roads Imports Pty Ltd. The Act applies nationally, with the concessions taking effect from the date the application is lodged, as stipulated in the Act. The application of this legislation is subject to certain exclusions, such as goods specified in section 269SJ, which cannot be subject to a Tariff Concession Order. The CEO must ensure that the goods in question are not substitutable by Australian-produced goods before approving the concession. The instrument also allows for objections to the concession application, as demonstrated by the submission from Adventure One Pty Ltd. The legislation's scope can be extended or modified through subordinate instruments, enabling further specificity or adjustments in the application of tariff concessions.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0702042 under the Customs Act 1901 (section 269P(3)) declare that the specified hydration systems are eligible for a lower rate of customs duty under a Tariff Concession Order (TCO). This declaration is based on the determination by the Chief Executive Officer of Customs (CEO) that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The general rate of duty on these goods is 5%, but the TCO reduces this to 0% (section 269P(3)). The TCO applies to goods that were subject to the application made on 12 February 2007, and it came into effect on that date (subsection 269S(1)).
The obligations and requirements imposed by this Act on the parties include the necessity for applicants, such as Off Roads Imports Pty Ltd, to ensure that their applications meet the core criteria, which involves demonstrating that no substitutable goods were produced in Australia on the application date. The CEO has a duty to publish a notice in the Gazette inviting submissions from any interested parties who may object to the TCO application (subsection 269K(1)). The CEO must also consider any submissions received, such as the one from Adventure One Pty Ltd, in making their decision. Additionally, the Act ensures that the TCO does not affect the rights of any person as at the date of registration in a manner that would disadvantage them or impose liabilities for actions taken prior to the registration (subsection 269S(2)).
The Act includes provisions for potential breaches and consequences. While specific offences and penalties are not detailed in the provided explanatory statement, the Customs Act 1901 generally provides for various offences and penalties related to breaches of customs laws, which could include fines and imprisonment. The precise penalties would depend on the nature and severity of the breach, as outlined in the relevant sections of the Act and associated regulations. For instance, under the Customs Act, contraventions can lead to criminal charges, and in some cases, civil penalties may also apply. The Tariff Concession Instrument No. 0702042 specifically ensures that no liabilities are imposed on any person by the TCO, and it also provides for potential refunds of duty for importers of the specified goods under the Regulations (paragraph 126(1)(r)).