EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0706103
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.
Unimark Identification Services applied for a TCO in respect of certain fume extractors on 26 April 2007.
Instrument
TCO No 0706103 was made on 6 July 2007. It declares that those certain fume extractors 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. 0706103 is taken to have come into force on 26 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. 0706103 was enacted in 2007 as part of the Customs Act 1901. This legislation was introduced to address the need for a streamlined process to grant tariff concessions for specific goods, thereby facilitating trade by reducing the customs duty on certain imported items. The instrument was enacted by the Australian government through the authority of the Chief Executive Officer of Customs, who has the power to make Tariff Concession Orders under section 269F of the Act. The primary policy objective of this measure is to support Australian businesses by ensuring they are not unfairly disadvantaged by high tariffs on goods that cannot be produced domestically, thus encouraging competitive trade practices.
The instrument specifically relates to the application by Unimark Identification Services for a tariff concession on certain fume extractors. The CEO of Customs determined that no substitutable goods were produced in Australia for these items, thereby satisfying the core criteria for a tariff concession. Consequently, the CEO issued Tariff Concession Order No. 0706103, which reduced the duty on these fume extractors from 5% to 0%. This order came into effect on 26 April 2007, the date the application was lodged, and no submissions were received opposing the concession. This initiative is expected to benefit importers by potentially allowing them to claim refunds for duties paid on these goods imported since the effective date of the concession.
Scope and Application
The Customs Act 1901 provides a framework under which the Chief Executive Officer of Customs (the CEO) may issue Tariff Concession Orders (TCOs), which lower the rate of customs duty on specified goods. The Act applies to any person who may apply for a TCO in respect of goods, provided that the goods do not fall under the categories specified in section 269SJ of the Act which cannot be subject to a TCO. The instrument extends to any goods for which a TCO is applied and approved by the CEO, and the geographical reach of the Act is national, as it applies across Australia. The Act allows for the possibility of subordinate instruments that may extend or restrict the application of the TCOs, although in this instance, no such instruments have been mentioned. The Tariff Concession Instrument No. 0706103 specifically applies to certain fume extractors for which Unimark Identification Services applied, and the TCO reduces the duty rate from the general 5% to 0%. This TCO came into effect on the date of the application, 26 April 2007, and does not affect the rights of any person adversely or impose any liabilities on anyone for actions taken prior to the TCO's registration.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0706103 are sections 269C, 269P, and 269S, which provide the framework for making a Tariff Concession Order (TCO). Under section 269C, the Chief Executive Officer of Customs (the CEO) must determine if an application for a TCO meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the CEO is satisfied that the application meets these criteria, they are required to make a written order declaring that the specified goods are subject to a reduced rate of duty (section 269P(3)). The TCO itself, in this case, applies a zero per cent duty rate to certain fume extractors, as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that any application for a TCO is not in respect of goods specified in section 269SJ of the Act, which are ineligible for TCOs (section 269F). Once an application is deemed valid, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not proceed (subsection 269K(1)). If no submissions are received, the CEO can proceed to make the TCO. Furthermore, the CEO must ensure that the TCO does not adversely affect the rights of any person (other than the Commonwealth) as at the date of registration (subsection 269S(1)).
The legislation also outlines potential consequences for non-compliance. However, in this specific instance, the Act does not detail specific offences or penalties related to breaches of the TCO or its provisions. Nevertheless, any failure to comply with the terms of the TCO could result in general legal consequences under the Customs Act 1901 and associated regulations, including the imposition of duties, fines, or other penalties as deemed appropriate by the relevant authorities. Importers, however, are afforded the right to apply for a refund of duties paid on the affected goods imported before the TCO came into effect, as provided under paragraph 126(1)(r) of the Regulations.