EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703992
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 Pty Ltd applied for a TCO in respect of certain document covers on 14 March 2007.
Instrument
TCO No 0703992 was made on 8 June 2007. It declares that those certain document covers 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. 0703992 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 amended to introduce the scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, aiming to address the gap in providing tariff concessions on certain imported goods. Enacted by the Parliament of Australia, the Act seeks to streamline the process for reducing customs duties on specific goods that are not produced in Australia and for which no substitutable goods are available. The objective is to encourage trade by making imported goods more affordable, thereby supporting businesses and consumers. The explanatory statement for Tariff Concession Instrument No. 0703992, made on 8 June 2007, details the application by Peleman Industries Pty Ltd for a tariff concession on certain document covers, which was approved after it was determined that no substitutable goods were produced in Australia. This decision led to a reduction in customs duty from 5% to 0% on these goods.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking a lower rate of customs duty on specific goods, provided the application meets the criteria outlined in section 269C. The process involves assessing whether the goods in question are substitutable by goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. If the CEO determines that the application meets the core criteria, a TCO is issued, and the specified rate of duty is applied to the goods. Notably, the TCO does not disadvantage any person other than the Commonwealth, nor does it impose any liabilities on such persons for actions taken prior to the TCO's registration. The geographic and jurisdictional reach of this legislation is national, as it applies across Australia under Commonwealth law. The Act’s application may be extended or restricted through subordinate instruments, which provide additional rules and guidelines for the implementation of TCOs.
Key Provisions
The primary sections relevant to the Tariff Concession Instrument No. 0703992 under the Customs Act 1901 include sections 269F, 269C, 269B, and 269P(3) (subsection 269K(1) and subsection 269S(1) are also relevant). These sections collectively outline the process and criteria for applying for and making a Tariff Concession Order (TCO). Under section 269F, any person can apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. The CEO must then determine if the application meets the core criteria, primarily established in sections 269C and 269B, which focus on whether substitutable goods are produced in Australia. If the application meets these criteria, the CEO must issue a written TCO, as per section 269P(3), effectively reducing the customs duty rate for the specified goods. The CEO is also mandated to publish a notice in the Gazette, inviting any objections to the TCO application (subsection 269K(1)). The TCO comes into force on the date the application is lodged (subsection 269S(1)).
The obligations imposed by the Customs Act 1901 on the parties involved are primarily directed at the CEO of Customs. The CEO is responsible for assessing TCO applications to ensure they meet the core criteria specified in sections 269C and 269B. This involves verifying that no substitutable goods are produced in Australia on the day the application is lodged. Additionally, the CEO must publish a notice in the Gazette inviting objections to the TCO application and consider any submissions received. If the CEO determines that the application meets the criteria, they must issue the TCO. The Act also mandates that the TCO does not affect any rights or impose any liabilities on persons other than the Commonwealth in respect of actions taken before the TCO registration date.
The Customs Act 1901 does not explicitly state offences, penalties, or civil/criminal consequences for breaches related to Tariff Concession Orders. However, any failure by the CEO to adhere to the statutory requirements for assessing and issuing TCOs could potentially lead to legal challenges regarding the validity of the TCO. For other breaches of the Customs Act, including those not directly related to TCOs, penalties can include fines and imprisonment. For example, under section 210 of the Customs Act 1901, a person found guilty of an offence can be subject to a penalty of up to 10,000 penalty units or imprisonment for up to 10 years, or both, depending on the severity of the offence. The exact penalties would depend on the nature and circumstances of the breach.