EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0706223
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.
Bridgestone Australia Ltd applied for a TCO in respect of certain tyre cord on 30 April 2007.
Instrument
TCO No 0706223 was made on 20 July 2007. It declares that those certain tyre cord 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. 0706223 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 Tariff Concession Instrument No. 0706223 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific goods. This legislation was introduced to facilitate the reduction of customs duty rates for certain imported goods, provided that no substitutable goods are produced in Australia. The instrument was made on 20 July 2007, in response to an application by Bridgestone Australia Ltd for a tariff concession on certain tyre cord. The primary objective of this legislation, as stated in the explanatory statement, is to ensure that the application of tariff concessions does not disadvantage any person and does not impose liabilities on individuals for actions taken prior to the registration of the concession. It also seeks to benefit importers by enabling them to apply for refunds of duty on goods imported since the effective date of the concession. The instrument was enacted by the Chief Executive Officer of Customs, following the satisfaction of core criteria outlined in the Customs Act 1901.
Scope and Application
The Tariff Concession Instrument No. 0706223 under the Customs Act 1901 applies to any person or entity seeking a tariff concession order for specific goods, in this case, certain tyre cord. The scope of the legislation encompasses the process through which the Chief Executive Officer of Customs determines whether an application for a tariff concession order meets the core criteria, which include the condition that no substitutable goods are produced in Australia in the ordinary course of business. This Act operates on a national level, affecting imports and duties across Australia, and is not limited by state or territory boundaries. While the Act generally facilitates tariff concessions, it excludes goods specified in section 269SJ of the Customs Act 1901, which are not eligible for such concessions. The Act may also extend its application through subordinate instruments, which can provide further clarification or detail on the implementation of tariff concession orders.
Key Provisions
The main operative sections of the Customs Act 1901, as applied in Tariff Concession Instrument No. 0706223, include sections 269C, 269B, and 269P(3) (subsections 269K(1) and 269S(1)). Section 269C stipulates that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines key terms such as ‘goods produced in Australia’, ‘ordinary course of business’, and ‘substitutable goods’. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a TCO. Subsection 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions on the TCO application, while subsection 269S(1) provides that a TCO comes into force on the day the application is lodged.
The Act imposes several obligations on the CEO of Customs. Once a TCO application is accepted as valid, the CEO must publish a notice in the Gazette, inviting any interested party to submit objections (subsection 269K(1)). The CEO must also ensure that the application meets the core criteria by confirming that no substitutable goods were produced in Australia on the application date. If the criteria are met, the CEO must make a written TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods in question (section 269P(3)). The CEO must also ensure that the TCO does not adversely affect the rights of any person as at the date of registration, particularly with respect to actions taken prior to the TCO’s effective date.
Breach of the requirements or provisions under the Customs Act 1901 may lead to various consequences. Although the explanatory statement does not explicitly detail offences or penalties, the Act generally provides for both civil and criminal penalties for non-compliance with customs regulations. For instance, failure to comply with customs duties can result in fines, seizure of goods, or imprisonment. The maximum penalties can vary significantly depending on the nature and severity of the breach, but they could include substantial fines or imprisonment terms for serious offences. The specific penalties would be governed by the broader provisions of the Customs Act 1901 and related legislation.