EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703687
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.
Target Australia Pty Ltd applied for a TCO in respect of certain bathroom and/or toilet articles on 5 March 2007.
Instrument
TCO No 0703687 was made on 25 May 2007. It declares that those certain bathroom and/or toilet articles 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. 0703687 is taken to have come into force on 5 March 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 Commonwealth Parliament, established a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act aimed to address the problem of ensuring fair trade practices by allowing the reduction or exemption of customs duties on certain imported goods under specific conditions. The introduction of TCOs seeks to promote economic efficiency and competitiveness by providing tariff relief to importers of goods for which no domestic equivalent is produced, thereby encouraging imports and potentially lowering consumer prices. The policy objective of this legislative measure is to facilitate smoother international trade by reducing the financial burden on importers, thus promoting economic growth and consumer welfare within Australia.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act applies to individuals and entities that seek to apply for a TCO concerning particular goods, ensuring that the application adheres to the criteria outlined in the Act. The application process is initiated when a person applies to the CEO for a TCO in respect of goods, provided those goods are not specified in section 269SJ of the Act. The CEO must then assess whether the application meets the core criteria, specifically if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these conditions are met, the CEO is required to make a written order, a TCO, applying a lower rate of customs duty to the specified goods. This Act applies across Australia, as it is a Commonwealth Act, thereby having national jurisdiction.
The application of the Customs Act 1901 extends to all individuals and entities seeking tariff concessions for goods imported into Australia, ensuring compliance with the outlined criteria and processes. The Act does not impose any liabilities on persons other than the Commonwealth and does not disadvantage any person by affecting their rights as at the date of registration concerning anything done or omitted before the registration date. The rights of importers are positively affected, allowing them to apply for a refund of duty on goods imported since the TCO is taken to have come into force. The geographic reach of this legislation is nationwide, applying to all states and territories within Australia.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0703687 under the Customs Act 1901, specifically section 269C (3), establish that a Tariff Concession Order (TCO) can be made by the Chief Executive Officer of Customs (CEO) if the application for a TCO meets the core criteria. This involves a determination that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). The CEO must make a written order, a TCO, declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a specified rate of duty (section 269P(3)). For this particular instrument, TCO No. 0703687 applies to certain bathroom and/or toilet articles, reducing the duty rate from 5% to 0%.
The obligations imposed by this Act on parties such as Target Australia Pty Ltd, who applied for a TCO, include providing sufficient evidence and information to demonstrate that the goods for which the concession is sought are not substitutable by goods produced in Australia (section 269C). The CEO must then assess whether the application meets the core criteria and, if satisfied, proceed to issue the TCO. The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties regarding the application (section 269K(1)). The TCO, once made, applies from the date the application was lodged, without retroactively affecting any rights or imposing new liabilities on any party other than the Commonwealth (section 269S(1)).
Should any party violate the provisions of the Customs Act 1901 or the related regulations, several consequences may follow. While the specific instrument does not detail offences under the Customs Act, breaches of related provisions can lead to penalties. For instance, under section 226 of the Customs Act 1901, unauthorised importation of goods can attract a penalty of up to 10,000 penalty units for individuals and 50,000 penalty units for bodies corporate, with additional penalties for subsequent offences. Furthermore, any fraudulent behaviour or misrepresentation in the application process for a TCO can also lead to civil or criminal penalties as prescribed under the relevant laws. The exact penalties depend on the severity and nature of the breach.
In summary, the Tariff Concession Instrument No. 0703687 under the Customs Act 1901 provides a framework for granting tariff concessions on specific imported goods, provided certain criteria are met. It outlines the obligations of the CEO and applicants, the process for publishing notices and inviting submissions, and the effective date of the TCO. Breaches of the Act or related regulations can result in significant penalties, both civil and criminal, depending on the nature and severity of the violation.