EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0706138
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.
The Temple Emanuel applied for a TCO in respect of certain phylacteries on 9 May 2007.
Instrument
TCO No 0706138 was made on 20 July 2007. It declares that those certain phylacteries 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. 0706138 is taken to have come into force on 9 May 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 was enacted to provide a framework for the regulation of customs duties and the control of goods entering and leaving Australia. The Act allows for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce the rate of customs duty for certain goods under specific conditions. The problem or gap that this legislation addresses is the need for a mechanism to provide tariff concessions for goods that cannot be substituted by Australian-produced items, thereby supporting certain economic and cultural objectives. The Tariff Concession Instrument No. 0706138 was introduced to provide a zero per cent customs duty rate on certain phylacteries, as applied for by the Temple Emanuel, ensuring that these goods are not subject to a higher duty rate. This was enacted by the Australian Government, aiming to support cultural heritage and religious practices by ensuring affordable access to such items. The Act, through its provisions, ensures that the rights of importers are protected and that no existing liabilities are imposed by the issuance of the TCO.
Scope and Application
The Customs Act 1901, as amended, includes provisions for Tariff Concession Orders (TCOs) under Part XVA, allowing the Chief Executive Officer of Customs to apply lower rates of customs duty on specified goods. This process is applicable to any person who can demonstrate that the goods they wish to import are not produced in Australia in the ordinary course of business and do not have substitutable goods available domestically, as outlined in sections 269C and 269SJ of the Act. The application must meet core criteria, including the absence of substitutable goods produced in Australia as stipulated in section 269D. Once the CEO determines that the application is valid, they issue a written order specifying the reduced duty rate applicable to the goods, as per section 269P(3). The application process mandates that the CEO publishes a notice in the Gazette inviting submissions from any interested parties, although no submissions were received for TCO No. 0706138. The Tariff Concession Order takes effect from the date the application is lodged, and it does not retroactively disadvantage or impose liabilities on any person, though it does entitle importers to duty refunds for goods imported since the effective date of the order.
Key Provisions
The Tariff Concession Instrument No. 0706138, made under section 269F of the Customs Act 1901 (the Act), grants a concession in the rate of customs duty for certain phylacteries. This concession was applied for by the Temple Emanuel on 9 May 2007 and was made on 20 July 2007. The instrument, TCO No. 0706138, declares that these phylacteries are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a rate of duty of 0% instead of the general rate of 5% (ss 269P(3), 126(1)(r)).
The obligations under this Act primarily rest on the Chief Executive Officer of Customs (the CEO). The CEO is required to decide whether an application for a Tariff Concession Order (TCO) meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business (s 269C). If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods in question are subject to the specified tariff item (s 269P(3)). The CEO must also publish a notice in the Gazette inviting any submissions against the TCO application (s 269K(1)). In this case, no submissions were received.
Failure to comply with the requirements of the Customs Act 1901 can lead to various consequences. Although the explanatory statement does not detail specific offences or penalties, breaches of the Act can generally result in civil or criminal penalties. The maximum penalties for contraventions of customs laws can include fines and imprisonment, as outlined in the relevant sections of the Customs Act and associated regulations. The penalties can vary depending on the severity and intent of the breach.
The TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, so as to disadvantage that person or impose any liabilities (s 269S(1)). Importers of the goods will have the right to apply for a refund of duty on goods imported since the TCO is taken to have come into force, which is beneficial under paragraph 126(1)(r) of the Regulations. This ensures that the TCO does not impose any liabilities on any person.