EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707021
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.
B & R Enclosures Pty Ltd applied for a TCO in respect of certain coolers on 10 May 2005.
Instrument
TCO No 0707021 was made on 23 July 2007. It declares that those certain coolers 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. 0707021 is taken to have come into force on 10 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, as supplemented by Tariff Concession Instrument No. 0707021 enacted in 2007, addresses the problem of ensuring that Australian businesses have access to competitively priced imported goods, which is critical for maintaining economic efficiency and competitiveness. This legislation enables the Chief Executive Officer of Customs to grant tariff concessions on certain imported goods, thereby lowering the customs duty on these items. The underlying policy objective is to facilitate the import of goods that are not produced domestically or are not produced in sufficient quantities to meet market demand, ensuring that Australian consumers and businesses can access a broader range of affordable products.
The instrument was introduced by the Australian Government and was enacted to streamline the process of applying for and granting tariff concessions on specific goods. It ensures that the application process is transparent and allows for public consultation, thereby maintaining fairness and accountability. The Tariff Concession Order No. 0707021, for example, was issued following an application by B & R Enclosures Pty Ltd for certain coolers, resulting in a tariff reduction from the general rate of 5% to free, effective from the date the application was lodged.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0707021, pertains to the concession of customs duties on specific goods, provided that these goods are not produced in Australia and no substitutable goods are produced domestically. The act applies to any person or entity that seeks to import goods eligible for a Tariff Concession Order (TCO). The CEO of Customs must assess applications for TCOs, and if the criteria are met, the CEO must issue a TCO that reduces or eliminates customs duty on the specified goods. This instrument affects the importation process for those who qualify under its terms and is effective from the date the application is lodged. The scope of the Act is limited to the goods specified in the TCO, and it does not affect any rights or liabilities incurred before the TCO's effective date. Any interested party may challenge the granting of a TCO by lodging a submission with the CEO during the specified consultation period, although no submissions were received for this particular TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0707021 (the Instrument) relate to the application process and decision-making criteria for Tariff Concession Orders (TCOs) under the Customs Act 1901 (the Act). Specifically, section 269F (1) allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. The CEO then assesses whether the application meets the core criteria set out in section 269C. If the CEO is satisfied that the application meets these criteria, they are required under section 269P(3) to make a written order (the TCO) specifying that the goods in question are subject to a prescribed tariff concession. In this case, Instrument No. 0707021 declares that certain coolers are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a free rate of duty instead of the general rate of 5%.
The Act imposes specific obligations on the CEO regarding the assessment and implementation of TCO applications. Under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from interested parties if they consider the TCO should not proceed. In this instance, no submissions were received. Furthermore, under section 269S(1), the TCO is deemed to have come into force on the date the application was lodged. This means that for Instrument No. 0707021, the concession is effective as of 10 May 2007. The Act also ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO as of the registration date, and it does not impose any new liabilities on individuals or entities.
Failure to comply with the requirements of the Customs Act 1901 and the associated regulations may result in civil or criminal penalties. While the specific penalties for breaches related to TCOs are not detailed in the provided text, the Act generally outlines a range of sanctions for non-compliance with customs regulations. These may include fines, imprisonment, or both, depending on the severity of the breach. For example, section 126 of the Customs Regulations 1993 (the Regulations) provides for penalties for offences related to the importation of goods, which could include failure to comply with tariff concessions. The maximum penalties are determined by the nature and extent of the offence, and they can vary significantly, reflecting the seriousness of the breach.
The Tariff Concession Instrument No. 0707021 also outlines specific procedural requirements for the application and implementation of TCOs. The CEO must ensure that the application meets the core criteria set out in the Act, which includes verifying that no substitutable goods were produced in Australia on the day the application was lodged. The CEO’s decision-making process is further governed by the need to publish a notice in the Gazette to allow for public submissions, as required by section 269K(1) of the Act. The absence of any submissions in response to the notice indicates that no objections were raised against the concession. This procedural transparency helps to ensure that the process is fair and that all interested parties have an opportunity to voice their concerns.
In summary, the Tariff Concession Instrument No. 0707021, under the Customs Act 1901, facilitates the application and granting of tariff concessions for specific goods, provided they meet the criteria set out in the Act. The CEO is responsible for assessing applications, making written orders, and ensuring compliance with procedural requirements such as publishing notices in the Gazette. While the specific penalties for non-compliance are not detailed in the provided text, the Act and associated regulations establish a framework for imposing civil or criminal consequences for breaches, thereby maintaining the integrity of the customs duty system.