EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702119
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.
Linax Australia Pty Ltd applied for a TCO in respect of certain desklifters on 9 February 2007.
Instrument
TCO No 0702119 was made on 30 April 2007. It declares that those certain desklifters 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. 0702119 is taken to have come into force on 9 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 Parliament of Australia, provides a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). The purpose of this legislation is to allow for the reduction or elimination of customs duty on certain imported goods, promoting trade and economic growth by providing relief to businesses and consumers. In particular, TCOs address the gap where imported goods may be subject to lower duty rates if they are deemed non-substitutable by locally produced goods. The policy objective is to facilitate the importation of goods that are not produced domestically, thereby supporting competitive markets and consumer choice. The Tariff Concession Instrument No. 0702119, made under this Act, provides a zero percent duty rate for certain desklifters imported by Linax Australia Pty Ltd, effective from 9 February 2007, after the CEO determined that no substitutable goods were produced in Australia.
Scope and Application
The Customs Act 1901, under its Part XVA, facilitates the application for Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), who can grant these orders to apply lower rates of customs duty on certain goods. Specifically, a person can apply for a TCO for goods that are not specified in section 269SJ of the Act, which lists those goods ineligible for TCOs. The CEO must assess whether the application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. If the CEO is satisfied with the application, a TCO is issued, as was the case with Linax Australia Pty Ltd's application for desklifters on 9 February 2007, resulting in TCO No. 0702119 which lowered the duty rate to 0% from the general rate of 5%. The TCO, effective from the date of the application, does not retroactively affect rights or impose liabilities, and benefits importers by allowing duty refunds for imports since the TCO's effective date.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0702119, under the Customs Act 1901, revolve around the establishment of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269K(1), 269P(3)). Section 269F of the Act allows for the application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, they must make a written order declaring the goods subject to the TCO. This order specifies that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a particular rate of duty applied. In this case, the CEO declared that certain desklifters are subject to a 0% duty rate, as no substitutable goods were produced in Australia, satisfying the core criteria.
The obligations imposed by the Act on the parties governed by this legislation include the requirement for applicants to ensure their applications meet the core criteria specified in section 269C. The CEO, on receiving a valid application, must make a decision on whether to grant the TCO based on the criteria. If the CEO decides in favour, they must publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any interested parties. The CEO must also consider any submissions received and make the TCO accordingly. Additionally, the CEO must ensure that the TCO does not disadvantage any person other than the Commonwealth or impose liabilities on such persons for actions taken before the registration date.
The Act delineates specific consequences for breaches of its provisions. Although the Explanatory Statement does not detail specific offences or penalties, it is understood that breaches of the Customs Act 1901 can lead to various civil and criminal consequences. These may include fines and imprisonment, as stipulated in the general provisions of the Customs Act and other related legislation. The maximum penalties can vary depending on the nature and severity of the breach but are generally severe enough to deter non-compliance. In cases of deliberate or negligent breaches, the penalties could be particularly stringent, reflecting the seriousness of circumventing the legislative framework designed to regulate customs duties and imports.
In summary, Tariff Concession Instrument No. 0702119 establishes a mechanism for the application and approval of TCOs, ensuring that the right conditions are met before any concession is granted. The obligations for applicants and the CEO are clear, and while the specific penalties for breaches are not detailed in the statement, the potential for significant civil and criminal consequences underscores the importance of adhering to the legislative requirements.