EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0706384
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.
Gunnersen Pty Ltd applied for a TCO in respect of certain acrylic sheets on 02 May 2007.
Instrument
TCO No 0706384 was made on 23 July 2007. It declares that those certain acrylic sheets 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. 0706384 is taken to have come into force on 02 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 regulate the importation of goods into Australia, including the collection of customs duty. One specific mechanism under this Act is the Tariff Concession Order (TCO), which allows the Chief Executive Officer of Customs to grant tariff concessions on certain goods, effectively reducing the duty payable on them. The Tariff Concession Instrument No. 0706384, issued in 2007, was introduced to address the need for tariff concessions on certain acrylic sheets by Gunnersen Pty Ltd, ensuring that no substitutable goods were produced in Australia at the time of application. This legislative instrument was designed to provide relief to importers by granting a free rate of duty on these specific goods, thereby facilitating their entry into the Australian market without incurring the general rate of 5% duty. The process involved publishing a notice in the Gazette to invite submissions, which in this case, did not result in any objections, leading to the effective implementation of the tariff concession on 2 May 2007.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) scheme, provides a mechanism whereby the Chief Executive Officer of Customs can apply lower rates of customs duty to certain imported goods. This applies to individuals and entities who apply for a TCO for goods not specified in section 269SJ of the Act, which excludes certain goods from the scheme. The application of a TCO is contingent upon the CEO determining that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. Once a TCO is made, it applies retroactively from the date the application was lodged, benefiting importers by allowing them to claim refunds on duties paid on those goods since the effective date of the TCO. The CEO must also publish a notice in the Gazette inviting public submissions against the TCO, though no submissions were received in the case of TCO No. 0706384 concerning certain acrylic sheets. This instrument, effective from 2 May 2007, sets the duty rate for these sheets at free, down from the general rate of 5%, and does not impose any new liabilities or disadvantage existing rights of any person other than the Commonwealth.
Key Provisions
The Customs Act 1901, as outlined in Tariff Concession Instrument No. 0706384, facilitates the application for Tariff Concession Orders (TCOs) through the Chief Executive Officer (CEO) of Customs. Section 269F of the Act allows individuals or entities to apply for a TCO for specific goods. If the CEO is satisfied that the application pertains to goods not specified in section 269SJ, which lists goods ineligible for TCOs, the CEO must assess whether the application meets the core criteria under section 269C. A TCO application meets these criteria if, on the day it was lodged, no substitutable goods were being produced in Australia in the ordinary course of business. The definitions for 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 is satisfied that the application meets the core criteria, they are required under subsection 269P(3) to issue a written TCO declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties or entities it governs include the requirement for applicants to ensure that their applications are valid and that the goods in question are not specified in section 269SJ of the Act. The CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons to oppose the making of a TCO. This process ensures transparency and allows interested parties to voice their concerns. In the case of Gunnersen Pty Ltd, the CEO was required to assess the application and ensure that no substitutable goods were being produced in Australia at the time of the application. Additionally, once a TCO is made, the CEO must ensure it is registered, and that the rights of importers are protected in accordance with the provisions of the Act and the Regulations.
Failing to comply with the requirements of the Customs Act 1901 can lead to various legal consequences. Under section 269M of the Act, any person who knowingly makes a false or misleading statement in an application for a TCO commits an offence and is liable to a penalty. The maximum penalty for this offence is 10,000 penalty units or imprisonment for five years, or both. These penalties underscore the importance of accuracy and honesty in the application process. Furthermore, any person who fails to comply with the requirements of a TCO, such as by not correctly applying for a refund of duty on imported goods, may face additional civil or administrative penalties as outlined in the Customs Act and related Regulations. These provisions serve to maintain the integrity of the TCO process and ensure that only eligible goods benefit from tariff concessions.