EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702056
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.
The Duha Group Pty Limited applied for a TCO in respect of certain paint colour matchers on 13 February 2007.
Instrument
TCO No 0702056 was made on 11 May 2007. It declares that those certain paint colour matchers 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. 0702056 is taken to have come into force on 13 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, establishes a framework for the imposition of customs duties on imported goods. One significant feature of this Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which allow for the reduction or exemption of customs duties on certain goods. This mechanism was introduced to address the problem of ensuring that Australian industries remain competitive by granting tariff concessions to goods that are not produced domestically. The Tariff Concession Instrument No. 0702056, made on 11 May 2007, exemplifies the application of this framework. In this case, the Chief Executive Officer of Customs granted a tariff concession to Duha Group Pty Limited for certain paint colour matchers, allowing for a duty-free import of these goods by declaring them subject to item 50 of Schedule 4 to the Customs Tariff Act 1995. The decision to grant the concession was based on the absence of substitutable goods produced in Australia, thereby fulfilling the core criteria outlined in section 269C of the Customs Act 1901. The policy objective behind this concession is to support the importation of goods that are not domestically produced, thereby aiding in the maintenance of competitive pricing and industry viability within Australia.
Scope and Application
The Tariff Concession Instrument No. 0702056 applies to goods specified within the Customs Act 1901, specifically concerning the application of Tariff Concession Orders (TCOs). This Act allows for the application of a lower rate of customs duty on particular goods, provided they meet certain criteria such as not having substitutable goods produced in Australia at the time of application. The instrument pertains to the geographic jurisdiction of Australia, influencing trade and customs procedures across the nation. The scope of the Act includes any entities or individuals involved in the importation of the specified goods, subject to the conditions outlined in the TCO. Any exclusions or exemptions from the application of this Act are strictly defined within the legislative framework, particularly under section 269SJ of the Customs Act 1901, which specifies goods that cannot be subject to a TCO. The application and enforcement of the Act may be extended or modified through subordinate instruments, ensuring flexibility in addressing specific trade-related matters as they arise.
Key Provisions
The Customs Act 1901, specifically Part XVA, outlines a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. These orders allow for a reduced rate of customs duty on specified goods. Section 269F of the Act allows a person to apply to the CEO for a TCO in respect of goods, provided these goods are not listed in section 269SJ, which details goods ineligible for a TCO. To qualify, the goods must meet the core criteria under section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the CEO determines that the application meets these criteria, a TCO must be issued under section 269P(3), specifying that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily centered around the application process and the subsequent decision-making by the CEO. An applicant must ensure their application is made in accordance with the stipulations of section 269F and that the goods do not fall under the exclusions listed in section 269SJ. The CEO is obligated to review the application, determine if it meets the core criteria under section 269C, and, if satisfied, issue a TCO. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made, although in this case, no such submissions were received.
Failure to comply with the requirements set out in the Customs Act 1901, particularly in relation to the TCO process, could result in legal consequences. Although specific offences and penalties are not detailed in this excerpt, it is generally understood that breaches of customs regulations can lead to civil or criminal penalties, including fines and imprisonment. The precise penalties would depend on the nature and severity of the breach, as well as any additional provisions under related legislation. The TCO itself, however, does not impose any liabilities on any person and merely allows for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations.