EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705494
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.
NSW Leather Company Pty Ltd applied for a TCO in respect of certain split non grain bovine leather on 16 April 2007.
Instrument
TCO No 0705494 was made on 06 July 2007. It declares that those certain split non grain bovine leathers 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. 0705494 is taken to have come into force on 16 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, as amended, provides a framework for the imposition of customs duty on imported goods, but also allows for tariff concessions under certain conditions. The Tariff Concession Instrument No. 0705494, enacted in 2007, addresses the gap in the Customs Act 1901 by providing a mechanism through which certain goods can be subject to a lower rate of customs duty if specific criteria are met. This instrument was introduced to provide tariff relief to applicants by the Chief Executive Officer of Customs, ensuring that such relief is granted only when no substitutable goods are produced in Australia in the ordinary course of business. The objective is to encourage trade and industry by reducing the cost of imported goods, thereby enhancing their competitiveness. The instrument was developed following an application by NSW Leather Company Pty Ltd for tariff concessions on certain split non-grain bovine leather, and it was enacted without any submissions opposing the concession, thereby streamlining the process and ensuring minimal disruption to existing trade practices.
Scope and Application
The Tariff Concession Instrument No. 0705494 applies to the goods specified in the instrument, which in this case are certain split non grain bovine leathers, and is enacted under the Customs Act 1901. This legislation allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCO) which apply reduced customs duty rates to certain imported goods. The Act applies to individuals or entities that import the specified goods and seeks to ensure that such imports are not in competition with goods produced domestically. The geographic reach of this legislation is national, as it pertains to the Commonwealth's customs duties and applies across Australia. Exclusions or exemptions are limited to those goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The instrument does not extend or restrict its application through subordinate instruments, as it is a specific order made under the authority provided by the Customs Act 1901. The instrument was made on the basis that no substitutable goods were produced in Australia at the time of application, thereby meeting the core criteria set out in the Act.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0705494 are sections 269C, 269F, 269P, and 269SJ of the Customs Act 1901, which outline the process for making Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application does not pertain to goods specified in section 269SJ, which lists those goods ineligible for TCOs, the CEO must assess whether the application meets the core criteria specified in section 269C. If the application satisfies these criteria, the CEO is required under section 269P to issue a written order, or TCO, indicating that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are straightforward. The CEO must ensure that any TCO application is assessed against the core criteria, which includes verifying that no substitutable goods were produced in Australia at the time the application was lodged. Section 269K(1) further requires the CEO to publish a notice in the Gazette, inviting submissions from any interested parties who may oppose the granting of a TCO. This ensures transparency and an opportunity for stakeholders to voice their concerns. NSW Leather Company Pty Ltd, in this instance, submitted an application for a TCO for certain split non-grain bovine leathers on 16 April 2007, and the CEO, upon reviewing the application, issued TCO No. 0705494 on 6 July 2007.
The Act also delineates the consequences of non-compliance with its provisions. While specific offences and penalties are not outlined in the explanatory statement, general breaches of customs regulations can result in substantial penalties. For instance, offences under the Customs Act 1901 can lead to criminal charges and penalties, including fines and imprisonment. For civil contraventions, the penalties can include pecuniary sanctions. However, in the context of this particular TCO, no breaches or penalties are mentioned, as the process was followed correctly, and the TCO was issued as per the legislative requirements.
The Tariff Concession Instrument No. 0705494 ensures that the rights of individuals, except the Commonwealth, are not adversely affected by the TCO. Specifically, it states that the TCO does not impact the rights of persons or impose any liabilities for actions taken before the TCO's effective date. Importers of the specified goods benefit from the TCO by being eligible to apply for a refund of duty on goods imported since the TCO's effective date, as stipulated in paragraph 126(1)(r) of the Regulations. This provision ensures that the transition to the new tariff rates does not unfairly burden existing stakeholders.