EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703930
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 scroll saws on 14 March 2007.
Instrument
TCO No 0703930 was made on 01 June 2007. It declares that those certain scroll 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. 0703930 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 was enacted to facilitate and regulate the movement of goods across Australian borders, including the imposition of customs duties. Part XVA of the Act introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These orders apply a lower rate of customs duty to specified goods, provided certain criteria are met. Enacted by the Australian Parliament, the Act aims to streamline customs processes and provide tariff relief to support industry and consumers. Instrument No. 0703930 was made under this framework, granting a tariff concession on certain scroll saws, effectively reducing their duty from 5% to free. The process involved a public consultation period, during which no objections were received, and the order came into effect from the date of application submission, 14 March 2007.
Scope and Application
The Tariff Concession Instrument No. 0703930, pursuant to the Customs Act 1901, applies to goods specified in the instrument, in this case certain scroll saws, and the person or entity that applied for the tariff concession order, namely GMCAT Pty Ltd. The Act enables the Chief Executive Officer of Customs to reduce the rate of customs duty on specified goods, provided the application meets the core criteria set out in the Act. The application process involves determining whether the goods in question are substitutable by Australian-produced goods, a decision that hinges on the definitions provided in the Act concerning production in Australia and the ordinary course of business. The geographic reach of this legislation is national, as it pertains to the federal customs duties administered by the Commonwealth. The instrument does not affect any pre-existing rights or impose new liabilities on individuals or entities other than the Commonwealth, ensuring that only the rights of importers are beneficially impacted. This concession order came into force on the date the application was lodged, thereby retroactively applying to imports made from that date onwards. The instrument may be extended or further defined through subordinate instruments, as permitted under the broader framework of the Customs Act 1901.
Key Provisions
The main operative sections of the Customs Act 1901, specifically as it relates to Tariff Concession Orders (TCOs), are sections 269F, 269C, 269B, 269D, 269E, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B defines 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, a written order (TCO) must be made. Section 269S specifies that a TCO is deemed to come into force on the day the application for the TCO was lodged.
The Customs Act 1901 imposes several obligations on the parties involved. Firstly, applicants for a TCO must ensure that their application is not in respect of goods specified in section 269SJ, which are those that cannot be subject to a TCO. Secondly, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. The CEO must also decide whether the application meets the core criteria, specifically if no substitutable goods were produced in Australia in the ordinary course of business. If the CEO determines that the application meets these criteria, they must make a written TCO.
There are no specific offences, penalties, or civil/criminal consequences outlined in the Tariff Concession Instrument No. 0703930. However, the Customs Act 1901 and the Customs Tariff Act 1995 would apply to any breaches of customs regulations or tariff laws. The penalties for breaches can include fines, imprisonment, or both, depending on the severity of the offence and the specific provisions of the relevant Acts. The maximum penalties are not specified within the Explanatory Statement, but would be determined according to the general provisions of the Customs Act 1901 and any other applicable legislation.