EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703929
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.
GMCAT Pty Ltd applied for a TCO in respect of certain table saws on 14 March 2007.
Instrument
TCO No 0703929 was made on 01 June 2007. It declares that those certain table saws 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. 0703929 is taken to have come into force on 14 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 Parliament of Australia, provides a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The primary purpose of this legislative instrument is to address the need for concessional tariffs on certain goods that are not produced domestically. This mechanism aims to foster economic efficiency by allowing for the importation of goods at reduced tariff rates when equivalent goods are not produced in Australia. The Tariff Concession Instrument No. 0703929, issued in 2007, specifically targets certain table saws, granting them a tariff concession following an application by GMCAT Pty Ltd. The application process, outlined in the Act, ensures that the concession is granted only when no substitutable goods are produced in Australia, thereby protecting domestic industries where applicable.
Scope and Application
The Customs Act 1901 provides a framework through which Tariff Concession Orders (TCOs) can be implemented to offer reduced customs duties on certain goods. This mechanism is applicable to entities such as businesses or individuals who are importing goods and wish to benefit from lower duty rates, provided the goods are not specified in section 269SJ of the Act as ineligible for tariff concessions. The Act's application extends to the Commonwealth level, with the CEO of Customs having the authority to grant these concessions. The scope of the Act is further defined by the requirement that the goods subject to a TCO must not have substitutable alternatives produced in Australia, as outlined in sections 269C and 269D. Any exclusions or exemptions are clearly stipulated within the Act, with specific ineligibility criteria set out in section 269SJ. The legislative process also allows for the expansion or restriction of the Act's application through subordinate instruments, ensuring that the scheme remains adaptable to changing economic conditions and industry needs.
Key Provisions
The Tariff Concession Instrument No. 0703929, pursuant to the Customs Act 1901, introduces a tariff concession order (TCO) for certain table saws, reducing their customs duty rate to zero. This applies to the goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995, where the standard rate is 5%. Section 269F of the Act allows for applications to the Chief Executive Officer of Customs (CEO) to establish such tariff concessions, provided the goods are not specified in section 269SJ, which lists goods ineligible for TCOs. The core criteria for a TCO, as outlined in section 269C, require that no substitutable goods were produced in Australia at the time of application, as defined by sections 269D and 269E of the Act.
The obligations under the Customs Act 1901 for parties applying for a TCO, such as GMCAT Pty Ltd in this instance, include ensuring that their application is lodged under the correct conditions and that the goods in question do not fall under the restricted categories in section 269SJ. Once an application is deemed valid, the CEO must publish a notice in the Gazette inviting submissions from any interested parties, as stipulated in subsection 269K(1). In this case, no submissions were received, leading to the issuance of TCO No. 0703929 on 1 June 2007.
Breaching the conditions set forth in the Customs Act 1901, particularly in relation to the TCO process, may lead to various consequences. While the explanatory statement does not detail specific offences or penalties, it is implied that non-compliance with the terms of the TCO or misrepresentation of facts in the application could result in legal repercussions. The Act provides for enforcement mechanisms to ensure adherence to its provisions, though the exact penalties for breaches are not explicitly stated within the explanatory statement. The rights of importers are protected, as they can apply for a refund of duty on goods imported since the TCO is deemed to have come into effect on 14 March 2007, as per paragraph 126(1)(r) of the Regulations.