EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705007
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.
Pebblecrete Insitu Pty Ltd applied for a TCO in respect of certain mixers and batchers on 3 April 2007.
Instrument
TCO No 0705007 was made on 22 June 2007. It declares that those certain mixers and batchers 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. 0705007 is taken to have come into force on 3 April 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, enacted by the Australian Parliament, provides a framework under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) to lower the rate of customs duty on certain goods. The problem or gap this Act addresses is the potential for higher customs duties to impede the import of goods that are not produced domestically or for which there are no suitable substitutes available in Australia. In response to an application by Pebblecrete Insitu Pty Ltd, Tariff Concession Instrument No. 0705007 was enacted on 22 June 2007, declaring that specific mixers and batchers are subject to a reduced customs duty rate of 0%, down from the general rate of 5%. This was due to the absence of substitutable goods produced in Australia, fulfilling the core criteria outlined in section 269C of the Act. The policy objective is to facilitate the import of these goods by reducing the financial burden on importers, thereby potentially encouraging trade and competition in the market.
Scope and Application
The Tariff Concession Instrument No. 0705007 pertains to the Customs Act 1901 and specifically addresses the application of Tariff Concession Orders (TCOs) for certain goods. This instrument applies to individuals or entities that have applied for and received approval of a TCO, in this instance Pebblecrete Insitu Pty Ltd for certain mixers and batchers. The application of the TCO is limited to the goods specified in the order, with a particular focus on those goods for which no substitutable products are produced in Australia. The instrument operates within the Commonwealth jurisdiction, facilitating reduced customs duty rates for the specified goods as per the approved TCO. Exclusions are outlined in section 269SJ of the Act, which identifies goods that cannot be subject to a TCO. The application of the TCO is further governed by the Customs Tariff Act 1995, and any amendments or extensions of its application are made through subordinate instruments as permitted under the Customs Act 1901.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) provide for the establishment of Tariff Concession Orders (TCOs) (s 269F), which allow for a lower rate of customs duty on certain goods. A person can apply for a TCO (s 269F), and if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria (s 269C), a written order (TCO) is made (s 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (s 269K(1)). Tariff Concession Instrument No. 0705007 (the Instrument) was made on 22 June 2007, declaring that certain mixers and batchers are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, with a reduced rate of duty from 5% to 0% (s 269P(3)). The TCO is considered to have come into force on the day the application was lodged (s 269S(1)), which in this case was 3 April 2007.
The Act imposes several obligations and requirements on the parties it governs. Firstly, it requires that any person applying for a TCO ensure that the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO (s 269F). The CEO must then determine if the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). Additionally, upon accepting a valid application, the CEO must publish a notice in the Gazette inviting submissions from interested parties (s 269K(1)). If no submissions are received, the CEO proceeds to make the TCO (s 269P(3)). The TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration (s 269S(4)).
The Act provides for specific offences, penalties, or consequences for breaches. While the Act does not explicitly state the penalties for non-compliance, it is reasonable to infer that any actions taken in contravention of the TCO provisions could lead to civil or criminal consequences. Given that the Act is a Commonwealth statute, breaches may also be subject to penalties under other relevant legislation, such as the Crimes Act 1914, which could include fines or imprisonment depending on the severity of the breach. The maximum penalties would depend on the specific nature of the offence and the jurisdiction in which it is prosecuted.
In summary, the Customs Act 1901 and the accompanying Instrument No. 0705007 establish a framework for the application and granting of Tariff Concession Orders, which provide for reduced customs duty rates on certain goods. The Act mandates certain procedural steps, including the publication of notices in the Gazette and the consideration of submissions from interested parties. Failure to comply with the provisions of the Act or the TCO could result in civil or criminal penalties, although the specific penalties are not detailed within the Act itself.