EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702645
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.
Totalrubber Ltd applied for a TCO in respect of certain abrasive fluid conveying hoses on 28 February 2007.
Instrument
TCO No 0702645 was made on 18 May 2007. It declares that those certain abrasive fluid conveying hoses 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. 0702645 is taken to have come into force on 28 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 a framework for the administration of customs and excise duties, including the process for granting tariff concession orders (TCOs) to lower the rate of customs duty on certain goods. This Act addresses the gap by enabling the Chief Executive Officer of Customs to make orders that reduce duty rates on goods that are not produced in Australia and for which no substitutable goods exist in the domestic market. The Explanatory Statement for Tariff Concession Instrument No. 0702645, made on 18 May 2007, outlines the process for granting a TCO to Totalrubber Ltd for certain abrasive fluid conveying hoses, effective from 28 February 2007. This instrument was introduced to ensure that the general rate of duty on these goods, which is 5%, is reduced to free, aligning with the policy objective of facilitating trade and supporting businesses by reducing the cost of imported goods. The instrument did not attract any submissions opposing the concession, reflecting broad acceptance of the policy's objectives.
Scope and Application
The Tariff Concession Instrument No. 0702645, which applies under the Customs Act 1901, pertains specifically to the concession of tariff rates for certain goods that meet specified criteria. This legislation allows for the application of a lower rate of customs duty on goods that are subject to a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs, provided the application meets the core criteria outlined in the Act. The primary focus is on goods for which no substitutable goods are produced in Australia in the ordinary course of business, as stipulated in section 269C of the Act. The instrument was applied to certain abrasive fluid conveying hoses, where the general rate of duty is 5%, but the TCO reduced this rate to free, effective from the date of the application on 28 February 2007.
The geographic and jurisdictional reach of this Act is national, extending throughout Australia, as it operates under the Commonwealth's customs authority. The Act does not specify any exclusions or exemptions within the instrument itself, though it does reference exclusions under section 269SJ. The application process and the decision-making authority of the CEO can be extended or further defined through subordinate instruments, ensuring flexibility and precision in the application of tariff concessions. The instrument does not disadvantage any person or impose liabilities on any person for actions taken prior to its registration, ensuring that the rights of importers are beneficially affected, particularly through the provision for duty refunds under the Regulations.
Key Provisions
The Tariff Concession Instrument No. 0702645, made under the Customs Act 1901, pertains to Tariff Concession Orders (TCOs) (sections 269F and 269P(3)). This specific TCO, numbered 0702645, was issued on 18 May 2007, declaring that certain abrasive fluid conveying hoses are subject to a zero duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, whereas the general duty rate for these goods is 5%. The TCO was made in response to an application by Totalrubber Ltd on 28 February 2007, and it is effective from the date the application was lodged, in accordance with section 269S(1) of the Act.
The Act imposes several obligations on the parties involved. The Chief Executive Officer of Customs (CEO) must determine whether an application for a TCO meets the core criteria, which include the absence of substitutable goods produced in Australia on the day the application is lodged (section 269C). In this case, the CEO must ensure that no goods produced in Australia can be considered as substitutable for the abrasive fluid conveying hoses. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). In this instance, the CEO did not receive any submissions.
In terms of the consequences for breach, the Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for failing to comply with the provisions of a TCO. However, general penalties under the Customs Act for breaches related to customs duties and other customs-related offences may apply. These penalties can include fines and, in some cases, imprisonment. The exact penalties depend on the nature and severity of the breach, as well as any other applicable laws and regulations.