EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704651
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.
G James Australia Pty Ltd applied for a TCO in respect of certain sealant storers on 27 March 2007.
Instrument
TCO No 0704651 was made on 15 June 2007. It declares that those certain sealant storers 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. 0704651 is taken to have come into force on 27 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 Instrument No. 0704651, enacted in 2007, is a measure under the Customs Act 1901 designed to address the need for tariff concessions for specific goods. This instrument was introduced to provide relief from customs duties for certain goods, thereby promoting economic efficiency and competitiveness. The enacting body is the Chief Executive Officer of Customs, who has the authority to make Tariff Concession Orders under section 269F of the Customs Act 1901. The policy objective behind this legislation is to ensure that customs duty is not applied to goods for which there are no substitutable goods produced in Australia, thereby supporting industries that rely on imported materials. This legislative instrument aims to facilitate the importation of these specific goods at a reduced duty rate, thereby benefiting importers and potentially lowering costs for businesses and consumers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides the framework for Tariff Concession Orders (TCOs) that may be issued by the Chief Executive Officer of Customs (CEO). The Act applies to any person who may apply for a TCO in respect of goods, provided the goods are not those specified in section 269SJ, which excludes certain items from eligibility. The application process requires the CEO to assess whether the goods in question meet the core criteria, notably that no substitutable goods are produced in Australia in the ordinary course of business. If the CEO is satisfied, a written order is issued, applying a lower rate of customs duty or even making the goods duty-free, as specified in the order. The application for a TCO by G James Australia Pty Ltd for certain sealant storers resulted in TCO No. 0704651, which came into force on 27 March 2007, the date the application was lodged. This order was published in the Gazette, inviting submissions which, in this case, did not materialise. The TCO impacts the tariff rates for the specified goods, benefiting importers who can apply for duty refunds for imports since the TCO's effective date. Importantly, the TCO does not disadvantage any person by affecting their rights as they stood on the registration date or impose liabilities for actions taken prior to the registration.
Key Provisions
The key operative sections of the Customs Act 1901 under this instrument include sections 269F, 269C, 269B, 269D, 269E, 269P, and 269SJ (section 269F). These sections establish the framework for making Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. Section 269C specifies the core criteria an application must meet, which includes ensuring that no substitutable goods were produced in Australia on the day the application was lodged (section 269B). If these criteria are met, the CEO must issue a written order that specifies the goods subject to the concession and the applicable tariff item (section 269P). The TCO is deemed to come into force on the date the application is lodged (section 269S).
The Act imposes several obligations and requirements on the parties involved. The CEO must review the application to determine if it meets the core criteria, as outlined in section 269C. This involves verifying that no substitutable goods were produced in Australia on the day the application was submitted (section 269B). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO (section 269K). If no objections are received, the CEO must issue the TCO (section 269P). Importers of the goods subject to the TCO may apply for a refund of duties paid on imports made since the date the TCO is deemed to have come into force (section 126 of the Regulations).
Under the Customs Act, breaches of the provisions related to the issuance and application of TCOs can lead to both civil and criminal consequences. For example, if a person knowingly makes a false statement in an application for a TCO, they may be subject to a civil penalty of up to $22,200 for an individual or $111,000 for a corporation (section 269R). Additionally, under the Crimes Act 1914, knowingly making a false statement can result in criminal penalties, including fines and imprisonment. The specific penalties for criminal offences are detailed in the relevant sections of the Crimes Act 1914 and can vary based on the severity and circumstances of the offence.