EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705495
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 unsplit full grain bovine leather on 16 April 2007.
Instrument
TCO No 0705495 was made on 06 July 2007. It declares that those certain unsplit full 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. 0705495 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 Tariff Concession Instrument No. 0705495, made under the Customs Act 1901, was enacted to provide tariff concessions for certain unsplit full grain bovine leather, addressing the issue of duty rates for specific imported goods. The instrument was developed in response to an application from NSW Leather Company Pty Ltd on 16 April 2007, which sought a tariff concession order (TCO) for these leather products. The instrument was subsequently issued on 6 July 2007 by the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia, thus meeting the core criteria under section 269C of the Act. The policy objective, as outlined in the explanatory statement, is to ensure that the tariff concession does not disadvantage any person or impose liabilities in respect of actions taken before the registration date, while beneficially impacting the rights of importers who can now apply for a refund of duty on goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901 establishes a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, providing relief from certain customs duties for specified goods. This legislation applies to individuals or entities that apply for tariff concessions on goods, provided the goods do not fall under the exclusions outlined in section 269SJ of the Act. The Act extends to the entire Commonwealth of Australia, ensuring a uniform application of tariff concessions across all states and territories. Importantly, the Act does not disadvantage any person by affecting their rights as they stood on the date of registration of the TCO, nor does it impose any liabilities on any person in respect of actions taken before the TCO's registration date. Subordinate instruments, such as regulations, may further define the application and operational specifics of the TCOs.
Key Provisions
The Customs Act 1901, through its Part XVA, establishes the framework for Tariff Concession Orders (TCOs), as detailed in section 269C, which is fundamental for understanding the legislative provisions in question. This Act allows the Chief Executive Officer of Customs (CEO) to reduce the customs duty on certain goods when an application for a TCO is made and approved under section 269F. The TCO in question, TCO No. 0705495, applies to certain unsplit full grain bovine leather, and specifies that these goods will be subject to a duty rate of free, as opposed to the general 5% duty rate stipulated in the Customs Tariff Act 1995 (Tariff) under item 50 of Schedule 4. This concession was granted because the CEO was satisfied that no substitutable goods were being produced in Australia at the time the application was lodged, fulfilling the core criteria outlined in section 269C.
Entities and individuals subject to the Act, particularly those applying for or affected by TCOs, must adhere to the stipulations set forth in the Customs Act 1901. For instance, an applicant must ensure their goods meet the criteria for a TCO, such as the absence of substitutable goods being produced in Australia at the time of application, as per sections 269B, 269D, and 269E. The CEO has a duty to publish a notice in the Gazette under subsection 269K(1) inviting submissions from interested parties regarding the proposed TCO. This procedural requirement ensures transparency and allows for any objections to be raised before the TCO is finalised.
In terms of consequences for non-compliance or breach, the Act does not explicitly enumerate offences or penalties in the provided text. However, it is implicit that any misuse or incorrect application of the TCO provisions could potentially lead to legal scrutiny or disputes. For example, if an entity were to falsely claim that no substitutable goods were produced in Australia when, in fact, they were, this could result in the TCO being revoked, and the entity could face penalties under the relevant sections of the Customs Act 1901 and associated regulations. While the text does not specify maximum penalties, such breaches could attract penalties commensurate with the severity of the violation, including potential fines or other administrative actions.