EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0706222
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.
GMCAT Pty Ltd applied for a TCO in respect of certain battery powered measuring tapes on 30 April 2007.
Instrument
TCO No 0706222 was made on 13 July 2007. It declares that those certain battery powered measuring tapes 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. 0706222 is taken to have come into force on 30 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, provides a framework for the regulation of customs and excise in Australia. This Act was introduced to address the need for a streamlined process to manage tariff concessions, ensuring that certain goods benefit from reduced customs duty rates. Part XVA of the Customs Act 1901 establishes a scheme where Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs, provided certain criteria are met. The policy objective is to facilitate trade by lowering the duty on goods where appropriate, promoting economic efficiency and competitiveness without disadvantaging existing rights or imposing new liabilities on individuals or entities. The explanatory statement for Tariff Concession Instrument No. 0706222, made on 13 July 2007, details a specific instance where a TCO was issued for battery-powered measuring tapes, reducing the duty rate from 5% to free, following an application by GMCAT Pty Ltd. The instrument was introduced to ensure that the goods in question, for which no substitutable Australian-produced alternatives exist, receive the benefit of reduced customs duty, thereby encouraging their import and use in the Australian market.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) which are designed to reduce customs duty on certain goods. This Act applies to any person or entity that may apply for a TCO for goods that are not explicitly prohibited under section 269SJ of the Act, which includes goods such as those for use in the tobacco industry, motor vehicles, or certain food products. The scope of the Act is national, with the Commonwealth having the authority to implement these concessions. The CEO of Customs holds the power to decide on the eligibility of goods for a TCO based on whether substitutable goods are produced in Australia, as defined by section 269D, and if they are produced in the ordinary course of business as per section 269E. The process includes a requirement for the CEO to publish a notice in the Gazette, inviting any interested party to submit objections, although in this case, no submissions were received. The TCO is effective from the date the application is lodged, and it does not adversely affect the rights of any person, including the ability for importers to seek duty refunds from the date the TCO is deemed to have come into force. Any further specifics or extensions of application are typically detailed in subordinate instruments or regulations, such as those outlined under the Customs Tariff Act 1995.
Key Provisions
The Customs Act 1901, specifically within Part XVA, establishes the framework for Tariff Concession Orders (TCOs) which can be issued by the Chief Executive Officer of Customs (CEO) (s 269F). A TCO application may be made by any person (s 269F), and if the CEO determines that the application pertains to goods that are not listed in section 269SJ, which are ineligible for TCOs, the CEO must assess whether the application meets the core criteria. The primary requirement, outlined in section 269C, is that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. The terms "goods produced in Australia," "ordinary course of business," and "substitutable goods" are further defined in sections 269D, 269E, and 269F respectively. If the CEO is satisfied that the application meets these core criteria, a written order is issued, known as a TCO, specifying that the goods are subject to a prescribed tariff item from Schedule 4 of the Customs Tariff Act 1995 (s 269P(3)).
The obligations imposed by the Act include the requirement for the CEO to publish a notice in the Gazette once a TCO application is accepted as valid, inviting any interested party to submit reasons why the TCO should not be made (s 269K(1)). This ensures a level of transparency and opportunity for stakeholders to voice their concerns. In the case of TCO No. 0706222, the CEO did not receive any submissions, indicating that no objections were raised. The TCO itself, which applies to certain battery-powered measuring tapes, declares that these goods are subject to item 50 of Schedule 4 of the Tariff, with a duty rate of 5% reduced to free under the concession (s 269P(3)).
The commencement of a TCO, as stipulated by subsection 269S(1), is effective from the date the application for the TCO was lodged. For TCO No. 0706222, this date is 30 April 2007. Importantly, the TCO does not adversely affect the rights of any person other than the Commonwealth or impose any liabilities on anyone in respect of actions taken before the TCO's registration date. Importers of the goods will benefit from the ability to apply for a refund of duty on goods imported since the TCO's effective date (s 126(1)(r) of Regulations).
In terms of consequences for non-compliance, while the Act does not explicitly detail penalties for breaches, any violations of the terms or conditions set by the TCO could potentially lead to legal actions or financial penalties under other relevant sections of the Customs Act or associated regulations. The precise nature of such consequences would depend on the specifics of any breach and the relevant provisions of the law.