EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702862
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.
All Rubber Pty Ltd applied for a TCO in respect of certain fabric reinforced rubber blends sheeting on 23 February 2007.
Instrument
TCO No 0702862 was made on 18 May 2007. It declares that those certain fabric reinforced rubber blends sheeting 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. 0702862 is taken to have come into force on 23 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 regulatory framework governing the importation and exportation of goods within Australia. Specifically, Part XVA of the Act facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These TCOs enable a lower rate of customs duty on specified goods, subject to certain criteria being met. The problem or gap addressed by this legislation is the need to provide tariff concessions for goods that are not produced domestically, ensuring that Australian consumers and businesses have access to competitively priced imported goods without unfairly disadvantaging local producers. The policy objective is to support fair trade practices and economic efficiency by reducing duties where local production does not exist. The Tariff Concession Instrument No. 0702862, made on 18 May 2007, exemplifies this legislative intent by granting a tariff concession on certain fabric reinforced rubber blends sheeting, effectively reducing the duty rate from 5% to free, following a successful application by All Rubber Pty Ltd.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process through which Tariff Concession Orders (TCOs) are made by the Chief Executive Officer of Customs (CEO). This Act applies to any person who may apply to the CEO for a TCO in respect of goods, provided that these goods are not specified in section 269SJ of the Act as those that cannot be subject to a TCO. The core criteria for an application to be met include the condition that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must make a written order if satisfied that these criteria are met, declaring that the goods in question are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. The application of the Act extends across the Commonwealth, with the TCOs affecting the rights of importers beneficially by potentially allowing them to apply for a refund of duty on goods imported since the TCO came into force. Importantly, the Act ensures that the TCOs do not disadvantage any person or impose liabilities in respect of anything done or omitted before the date of registration. The scope of the Act is further extended or restricted through subordinate instruments, which provide additional definitions and criteria for the application of TCOs.
Key Provisions
The main operative sections of this Tariff Concession Order (TCO) under the Customs Act 1901 are sections 269C, 269P, and 269SJ (section 269C outlines the core criteria that a TCO application must meet, section 269P details the process for making a TCO, and section 269SJ specifies goods that cannot be subject to a TCO). Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that an application meets the core criteria, they must make a written order declaring that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, thereby applying a lower rate of customs duty. This TCO No. 0702862 specifically pertains to certain fabric reinforced rubber blends sheeting, which are now subject to a zero rate of duty under item 50 of Schedule 4 to the Tariff, as opposed to the general rate of 5%.
The Act imposes several obligations on parties and entities it governs. The CEO of Customs is required to ensure that an application for a TCO meets the core criteria specified in section 269C. This includes verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any person who might have reasons why the TCO should not be made, as per subsection 269K(1). Additionally, the CEO must take into account the definition of terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' as outlined in sections 269D, 269E, and 269F respectively.
In terms of civil and criminal consequences for breach of the Act, the Explanatory Statement does not detail specific offences or penalties. However, it is important to note that any failure to comply with the requirements of the Customs Act 1901 or the terms of the TCO could potentially lead to legal repercussions. These might include fines or other penalties imposed by the relevant authorities for non-compliance with customs regulations. For precise details on penalties, one would need to refer to the specific sections of the Customs Act 1901 that address breaches and their associated sanctions.