EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704148
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.
National Ceramic Industries Australia Pty Limited applied for a TCO in respect of certain ceramic tiles sorting tables on 20 March 2007.
Instrument
TCO No 0704148 was made on 18 June 2007. It declares that those certain ceramic tiles sorting tables 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. 0704148 is taken to have come into force on 20 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 incorporate the scheme for Tariff Concession Orders (TCOs) through Part XVA. This legislative framework was introduced to address the need for a mechanism to lower customs duties on certain goods, provided no substitutable goods are produced in Australia in the ordinary course of business. Enacted by the Australian Parliament, the policy objective behind this Act is to facilitate trade by reducing the duty burden on specific goods, thereby promoting economic efficiency and competitiveness. The Explanatory Statement for Tariff Concession Instrument No. 0704148, issued under this Act, details a case where National Ceramic Industries Australia Pty Limited successfully applied for a TCO for certain ceramic tiles sorting tables. The instrument declares that these goods are subject to a duty rate of free, down from the general rate of 5%, effective from the date of the application, 20 March 2007.
Scope and Application
The Tariff Concession Instrument No. 0704148 under the Customs Act 1901 applies specifically to certain ceramic tiles sorting tables, as declared in the Instrument. The Act authorises the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to reduce or waive customs duty on goods that meet specified criteria, namely that no substitutable goods are produced in Australia. This Instrument came into effect on the date the application was lodged, 20 March 2007, and it applies to the particular ceramic tiles sorting tables specified within it. The TCO does not disadvantage any person, including the Commonwealth, nor does it impose any new liabilities; however, it does entitle importers of these goods to apply for a refund of duty paid on imports since the TCO's effective date. The Instrument’s scope is confined to the goods explicitly mentioned and does not extend to other goods unless similarly applied for and approved by the CEO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0704148 are outlined in Part XVA of the Customs Act 1901 (section 269F). These sections provide the framework for Tariff Concession Orders (TCOs), which allow for a lower rate of customs duty on specified goods. Section 269F enables a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO, provided the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
The obligations imposed on parties under this Act are primarily on the CEO of Customs, who must ensure that TCO applications meet the core criteria. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO. For applicants, such as National Ceramic Industries Australia Pty Limited, the obligation is to demonstrate that the goods in question meet the criteria for a TCO. This includes proving that no substitutable goods are produced in Australia, as defined by sections 269D, 269E, and 269F of the Act. Additionally, the CEO must ensure that the rights of persons other than the Commonwealth are not adversely affected by the TCO, as per the provisions in section 269S(1) of the Act.
Offences and penalties are not explicitly detailed within the sections of the Customs Act 1901 referenced here. However, the failure to comply with the requirements for a TCO could lead to administrative consequences. For instance, if the CEO fails to properly assess an application or if an applicant provides false information, this could result in the denial of the TCO or other administrative actions. While specific penalties are not mentioned in the provided text, breaches of customs regulations generally carry significant penalties, including fines and potential criminal charges under the broader framework of the Customs Act 1901 and related legislation. The severity of penalties would depend on the nature and extent of the breach.