EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0706107
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 0706107 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. 0706107 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 Commonwealth Parliament, establishes a framework for the administration of customs duties and other charges. Specifically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can apply a lower rate of customs duty on certain goods. This legislative instrument addresses the gap by providing a formal process for the reduction of customs duty on goods for which there are no substitutable Australian-produced alternatives. The instrument aims to promote economic efficiency by lowering the cost of imported goods that are not domestically produced. The Tariff Concession Instrument No. 0706107, made on 6 July 2007, is an example of this process, where a TCO was granted for certain rubber products, reducing their customs duty rate from 5% to 0%.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0706107, governs the process by which tariff concessions can be applied to specific goods, providing reduced customs duty rates under certain conditions. This legislation applies to entities such as importers and manufacturers who seek tariff concessions for goods that are not produced in Australia, thereby ensuring that domestic industries are not adversely impacted. The instrument, which is part of the broader Customs Act, specifies that the Chief Executive Officer of Customs (CEO) must evaluate applications to determine whether the goods in question can benefit from a tariff concession, provided they meet the core criteria outlined in section 269C of the Act. The instrument came into effect on the date the application was lodged, in this case, 26 April 2007, and applies nationally across Australia. The CEO is mandated to publish a notice in the Gazette to invite submissions from interested parties, though in this instance, no submissions were received. Importantly, the instrument does not affect the rights of any person, except the Commonwealth, as it only benefits those importing the specified goods by potentially allowing for duty refunds for imports made since the concession came into effect.
Key Provisions
The Tariff Concession Instrument No. 0706107, issued under the Customs Act 1901, provides a framework for granting tariff concessions on certain goods. Section 269F (1) of the Act allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) regarding goods. If the CEO is satisfied that the application pertains to goods not excluded by section 269SJ, the CEO must assess whether the application meets the core criteria outlined in section 269C. Specifically, the CEO must determine if, on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B defines 'goods produced in Australia', 'ordinary course of business' and 'substitutable goods'. If the application meets these criteria, the CEO is required under section 269P(3) to issue a TCO, specifying the reduced customs duty rate for the goods in question.
The obligations under the Customs Act 1901 require any person seeking a tariff concession to submit an application to the CEO, ensuring it complies with the core criteria. The CEO, upon receiving an application, must publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to submit submissions opposing the concession. Following this, the CEO evaluates the application and, if satisfied, issues a TCO. The TCO in this instance, number 0706107, was made on 7 July 2007, declaring that certain rubber products are subject to a reduced duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995. The CEO’s decision is retrospective to the date the application was lodged, which in this case was 26 April 2007, as stipulated by subsection 269S(1). Importantly, the TCO does not affect the rights of any person, except the Commonwealth, regarding actions taken before the registration date.
In terms of consequences for breach, the Customs Act 1901 does not explicitly outline offences or penalties for non-compliance with the TCO provisions. However, the legal framework ensures that the rights of parties other than the Commonwealth are protected, and no liabilities are imposed on them for actions taken before the TCO is registered. Importers of the goods in question may apply for a refund of duty paid on those goods from the date the TCO is deemed to have come into force, as per paragraph 126(1)(r) of the Regulations. Any failure to adhere to the terms of the TCO could potentially lead to disputes regarding the applicability and benefits of the tariff concessions granted.