EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704719
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.
Sugar Australia Pty Ltd applied for a TCO in respect of certain deflagration suppressors on 29 March 2007.
Instrument
TCO No 0704719 was made on 15 June 2007. It declares that those certain deflagration suppressors 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. 0704719 is taken to have come into force on 29 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. 0704719 was introduced under the Customs Act 1901 to provide tariff concessions for certain goods. Enacted in 2007, this instrument was created to address the specific needs of importers by reducing the customs duty on certain deflagration suppressors from the general rate of 5% to 0%. The enactment of this order was in response to an application by Sugar Australia Pty Ltd, seeking to lower the duty on these goods because no substitutable products were produced in Australia. The policy objective was to facilitate trade by making certain goods more competitively priced without imposing any additional liabilities on individuals or entities. The decision to implement this tariff concession was made by the Chief Executive Officer of Customs, who followed the legislative framework outlined in the Customs Act 1901, ensuring that the application process adhered to the stipulated criteria and involved public consultation where no objections were raised.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to individuals and entities that seek to import goods eligible for tariff concessions. The scope of the Act encompasses various industries and goods, provided they meet the criteria set out in the legislation. The Act applies nationally across Australia, affecting all importers of goods that fall under the purview of the Customs Tariff Act 1995. The Act explicitly excludes certain goods from being subject to a TCO as per section 269SJ. The application process involves satisfying core criteria, such as the absence of substitutable goods produced in Australia, as defined in sections 269C, 269D, and 269E of the Act. The TCO in question, No. 0704719, applies to specific deflagration suppressors, reducing the duty rate from 5% to 0%, and it came into effect on 29 March 2007. The Act ensures that no pre-existing rights or liabilities of non-Commonwealth persons are adversely affected by the issuance of a TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0704719 (TCO) are sections 269C, 269B, 269D, 269E, and 269P of the Customs Act 1901, which establish the criteria for making Tariff Concession Orders (TCOs) and the conditions under which they apply. Specifically, section 269C requires that the Chief Executive Officer of Customs (CEO) must determine if the application for a TCO meets the core criteria, which is defined by the absence of substitutable goods produced in Australia on the day the application was lodged (section 269F). The definitions of "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269B, 269D, and 269E, respectively. If the CEO is satisfied that the application meets these criteria, a TCO is made, and the goods specified in the order are subject to a reduced rate of customs duty as specified in Schedule 4 to the Customs Tariff Act 1995.
The Customs Act 1901 imposes certain obligations and requirements on both the CEO and the applicants for TCOs. The CEO must ensure that the application for a TCO does not pertain to goods that are specified in section 269SJ of the Act, which lists goods that are ineligible for a TCO. Upon accepting an application as valid, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). This ensures transparency and allows for public input before the TCO is finalised. The CEO must also determine whether the core criteria specified in section 269C are met, which includes verifying that no substitutable goods were produced in Australia on the day the application was lodged.
Failure to comply with the requirements of the Customs Act 1901, or breaching the conditions of a TCO, can result in civil and criminal consequences. While the specific penalties are not detailed in the provided text, breaches of customs legislation generally attract fines and potential imprisonment under the Customs Act 1901. For instance, providing false information in an application for a TCO could lead to penalties under section 240 of the Act, which deals with penalties for false statements. The exact penalties would depend on the nature and severity of the breach, as well as any relevant case law and statutory guidelines.
Additionally, any person who imports goods subject to a TCO before it comes into force may still be entitled to a refund of duty under the Customs Act 1901, as long as the application for the TCO was lodged prior to the import. This is beneficial for importers who have already incurred duty payments on goods that subsequently qualify for a tariff concession. The Act ensures that the rights of such importers are protected and that they are not disadvantaged by the introduction of a TCO.
In conclusion, the Tariff Concession Instrument No. 0704719 establishes a framework for reducing customs duties on certain goods, provided that specific criteria are met. It imposes obligations on the CEO to process applications and ensure compliance with the Act's provisions, while also protecting the rights of importers and providing mechanisms for public consultation. Any breaches of the Act's requirements or conditions of a TCO could lead to civil or criminal penalties, although the specific penalties are not detailed in the provided text.