EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703749
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.
Signum Specialities Proprietary Limited applied for a TCO in respect of certain thermoformer pressure parts on 12 March 2007.
Instrument
TCO No 0703749 was made on 04 June 2007. It declares that those certain thermoformer pressure parts 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. 0703749 is taken to have come into force on 12 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, establishes a framework for administering customs duties and other charges on imported goods. The Act allows for the creation of Tariff Concession Orders (TCOs) to provide relief on certain goods under specific conditions, aiming to support industries by reducing the cost of imported components and materials. The 2007 Tariff Concession Instrument No. 0703749 was introduced to address the need for tariff concessions on certain thermoformer pressure parts, ensuring that no substitutable goods were produced in Australia at the time of the application. The objective was to facilitate the import of these goods without the imposition of duty, thereby supporting the industry and potentially encouraging local production over time. The instrument was enacted following an application by Signum Specialities Proprietary Limited and was effective from the date of application, with no negative impact on existing rights or liabilities of parties other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides the framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The Act applies to any person who may apply for a TCO concerning goods, provided that these goods do not fall within the specified exclusions outlined in section 269SJ. A TCO is applicable to goods for which the applicant demonstrates that no substitutable goods are produced in Australia in the ordinary course of business, as per sections 269C and 269D. The geographic reach of this legislation is national, as it applies across Australia. The Act extends its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the rates of duty applicable to the goods subject to a TCO. The commencement of a TCO is effective from the day the application is lodged, as stated in subsection 269S(1), ensuring that the rights of importers are beneficially affected without imposing any liabilities on them or disadvantaging any person other than the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0703749 under the Customs Act 1901 (section 269F) allow the Chief Executive Officer of Customs (the CEO) to grant a Tariff Concession Order (TCO) for specific goods. This instrument, TCO No. 0703749, applies to certain thermoformer pressure parts, allowing them to benefit from a zero rate of customs duty instead of the general rate of 5%. The instrument was made on 4 June 2007, following an application by Signum Specialities Proprietary Limited on 12 March 2007, and it came into force on the date of the application (subsection 269S(1)).
The Act imposes several obligations and requirements on the parties involved. Firstly, section 269C requires that for a TCO application to meet the core criteria, no substitutable goods must be produced in Australia in the ordinary course of business on the day the application was lodged. This determination is crucial as it ensures that the concession does not undermine domestic production. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made (subsection 269K(1)). If no submissions are received, the CEO proceeds to make the TCO. The CEO must also ensure that the TCO does not adversely affect any person's rights as at the date of registration and does not impose any liabilities on any person (subsection 269S(2)).
Failure to comply with the provisions of the Customs Act 1901 can result in various consequences. While specific offences and penalties related to the TCO itself are not detailed in the explanatory statement, breaches of the Customs Act generally can lead to both civil and criminal penalties. Civil penalties can include financial penalties and the recovery of unpaid duties and taxes. Criminal penalties can result in fines and imprisonment, depending on the severity of the breach. The maximum penalties can vary based on the specific provisions of the Act and the nature of the offence. However, the explanatory statement does not specify these penalties for the context of TCOs.