EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703990
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.
Peleman Industries (Australia) Pty Limited applied for a TCO in respect of certain binding spines on 14 March 2007.
Instrument
TCO No 0703990 was made on 01 June 2007. It declares that those certain binding spines 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. 0703990 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 Tariff Concession Order No. 0703990, enacted under the Customs Act 1901, was introduced to address a specific gap in the customs duty regime by providing tariff concessions for certain binding spines. This instrument was developed in response to an application by Peleman Industries (Australia) Pty Limited, who sought a reduction in customs duty on their imported binding spines. The Tariff Concession Orders scheme, established under Part XVA of the Customs Act 1901, allows the Chief Executive Officer of Customs to grant lower rates of customs duty on goods not specified in section 269SJ of the Act, provided certain criteria are met, including the absence of substitutable goods produced in Australia. The order was made on 1 June 2007, following a determination by the CEO that the application met the core criteria and no submissions were received opposing the concession. The order has been effective since 14 March 2007, the date the application was lodged, and provides for a free rate of duty on the specified binding spines, down from the general rate of 5%. This legislative measure aims to facilitate the importation of these goods, potentially benefiting importers by allowing them to apply for duty refunds on imports made since the order's effective date.
Scope and Application
The Tariff Concession Instrument No. 0703990 under the Customs Act 1901 applies to any person or entity that wishes to import certain binding spines, provided they meet the core criteria set out in the Act. Specifically, the instrument targets those goods for which an applicant can demonstrate that no substitutable goods are produced in Australia in the ordinary course of business. The scope of the Act encompasses both individuals and corporate entities involved in the importation of these specified goods, ensuring they benefit from the reduced duty rate once the Tariff Concession Order is made. The geographic reach of the Act is national, as it operates within the framework of the Commonwealth of Australia, and its application extends to all states and territories under federal law. There are specific exclusions for goods listed in section 269SJ of the Act, which cannot be subject to a Tariff Concession Order. The application of the Act can be further extended or modified through subordinate instruments, which may include regulations or further orders made by the Chief Executive Officer of Customs under the authority of the Act.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0703990 are Section 269F, 269C, 269B, and 269P. Section 269F (1) allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. The CEO must decide if the application meets the core criteria, outlined in Section 269C, which include ensuring that no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are satisfied, the CEO must issue a written order under Section 269P(3) that specifies the goods subject to the TCO.
The Act imposes obligations on both the applicant and the CEO. The applicant must ensure their application is valid and not concerning goods that cannot be subject to a TCO, as specified in Section 269SJ. The CEO must review the application, publish a notice in the Gazette inviting submissions from interested parties, and decide whether the application meets the core criteria. If the CEO is satisfied, they must issue a TCO. The CEO is also required to consult with relevant parties, as per Section 269K(1), although in this case, no submissions were received.
Offences and penalties under the Customs Act 1901 are not explicitly detailed in the Tariff Concession Instrument No. 0703990, but generally, breaches of the Customs Act can lead to both civil and criminal penalties. Civil penalties may include financial penalties for non-compliance or failure to declare goods correctly. Criminal penalties may involve fines and imprisonment for more serious breaches, such as fraud or smuggling. The specific maximum penalties would be determined by the broader provisions of the Customs Act and any associated regulations.
The Tariff Concession Instrument No. 0703990 itself does not introduce new penalties but operates within the existing framework of the Customs Act. Any breaches related to the application or implementation of a TCO would be subject to the penalties prescribed elsewhere in the Act. It is important for all parties involved to ensure compliance with both the specific terms of the TCO and the general requirements of the Customs Act to avoid any potential legal consequences.