EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0706104
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.
All Rubber Pty Ltd applied for a TCO in respect of certain rubber on 26 April 2007.
Instrument
TCO No 0706104 was made on 6 July 2007. It declares that those certain rubber 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. 0706104 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislation was introduced to address the need for tariff relief on goods that are not produced domestically, thereby promoting trade and encouraging economic growth by reducing the cost of imported goods. TCOs allow for a lower rate of customs duty on specified goods if certain conditions are met, such as the absence of substitutable goods produced in Australia. The objective of this legislation is to facilitate the application process for tariff concessions and to ensure that the rights of importers are protected, without imposing new liabilities on any party.
Scope and Application
The Customs Act 1901 applies to any individual or entity seeking tariff concessions for goods imported into Australia. Specifically, the Act allows for the application of lower rates of customs duty on goods that are the subject of a Tariff Concession Order (TCO). The scope of the Act extends to any person who may apply to the Chief Executive Officer of Customs for such a concession, provided the goods in question are not those specified in section 269SJ of the Act as ineligible for a TCO. The Act applies across the Commonwealth of Australia, with its provisions being applicable nationally. The application process involves the CEO determining whether the core criteria for a TCO are met, primarily by ensuring that no substitutable goods are produced in Australia at the time of the application. If these criteria are satisfied, a TCO is issued, effective from the date the application was lodged. This Act does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities in respect of actions taken prior to the issuance of a TCO.
Key Provisions
The Customs Act 1901, particularly Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. These orders allow for a lower rate of customs duty on specific goods. An application for a TCO can be made under section 269F, but it cannot be for goods listed in section 269SJ, which are ineligible for tariff concessions. The CEO must ensure that the application meets the core criteria set out in section 269C, which requires that on the day of application, no substitutable goods were produced in Australia in the ordinary course of business. Definitions of key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269B respectively. If the CEO determines that the application satisfies these criteria, they must issue a TCO under section 269P(3), specifying the applicable tariff item.
The obligations imposed by the Act on the CEO and applicants include the requirement to thoroughly assess each TCO application against the core criteria. The CEO must also publish a notice in the Gazette, inviting any interested parties to lodge submissions against the proposed TCO within a reasonable time frame, as stipulated in subsection 269K(1). If the CEO does not receive any submissions, they may proceed to make the TCO. All Rubber Pty Ltd's application for a TCO on certain rubber products was accepted and processed under these provisions, leading to the issuance of TCO No. 0706104 on 6 July 2007.
In terms of penalties and consequences, the Act does not explicitly outline criminal or civil penalties for breaches of the TCO provisions. However, failure to comply with the requirements for issuing or applying for a TCO could lead to disputes or legal actions in administrative or judicial forums. The CEO's decisions can be reviewed under the Administrative Appeals Tribunal Act 1975, and any errors or breaches could be subject to judicial review. Importers benefiting from a TCO must also adhere to other customs regulations and requirements to avoid any additional penalties or liabilities related to customs duties or other import obligations.
The commencement of the TCO, as per subsection 269S(1), is effective from the date the application was lodged, in this case, 26 April 2007. Importantly, the TCO does not retroactively affect the rights or liabilities of any person, ensuring that it only applies to transactions occurring from the effective date onwards. Importers can apply for duty refunds for goods imported since this date under paragraph 126(1)(r) of the Regulations, while the TCO does not impose any new liabilities on any person.