EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707732
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.
Donaghys Pty Ltd applied for a TCO in respect of certain mooring ropes on 24 May 2007.
Instrument
TCO No 0707732 was made on 19 October 2007. It declares that those certain mooring ropes 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 7.5%. 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. One submission objecting to the TCO application was received from Tapex Pty Ltd.
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. 0707732 is taken to have come into force on 24 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 Tariff Concession Instrument No. 0707732 was enacted under the Customs Act 1901 with the purpose of providing tariff concessions for certain goods, thereby addressing a gap in the duty rates applicable to imported goods. This instrument was introduced to provide a lower rate of customs duty on specific goods, in this case, certain mooring ropes, when no substitutable goods are produced in Australia. The instrument was initiated following an application by Donaghys Pty Ltd on 24 May 2007, and it was officially made on 19 October 2007 by the Chief Executive Officer of Customs, who determined that the application met the core criteria outlined in the Act. The enactment of this instrument aims to ensure that the importation of these goods is more economically viable, aligning with the policy objective of supporting Australian businesses by reducing the cost of imported materials where no local alternatives exist.
Scope and Application
The Tariff Concession Instrument No. 0707732 under the Customs Act 1901 applies to individuals or entities that are eligible to apply for tariff concessions on certain goods, specifically those who seek to import goods that are not being produced in Australia in the ordinary course of business. This Act is applicable on a Commonwealth level, as it falls under the federal jurisdiction of the Australian Customs Act. The scope of the Act extends to any goods that meet the specified criteria, which includes the condition that no substitutable goods are produced in Australia, as defined by the Act. The application of the Act is restricted by exclusions outlined in section 269SJ of the Customs Act 1901, which lists goods that cannot be subject to a Tariff Concession Order (TCO). The Act's application can be further extended or specified through subordinate instruments such as regulations, which may provide additional definitions or criteria relevant to the determination of tariff concessions.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0707732 under the Customs Act 1901 include sections 269C, 269F, 269P, and 269SJ. Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) concerning specific goods, while section 269C specifies the core criteria that must be met for the application to be valid. If the CEO is satisfied that the application meets these criteria, section 269P mandates the issuance of a TCO. The CEO must also ensure that the goods are not those specified in section 269SJ, which are ineligible for a TCO.
The obligations imposed by this Act on parties involve ensuring that applications for TCOs are made in accordance with the specified criteria and timelines. The CEO must conduct a thorough review of each application, verify that the goods do not have substitutable equivalents produced in Australia, and publish notices in the Gazette to invite objections to the proposed TCO. Any submissions received must be considered before a final decision is made. The applicant must provide all necessary information and documentation to support their application. If a TCO is granted, importers of the specified goods can apply for a refund of duties paid on those goods since the effective date of the TCO.
Breaches of the provisions of the Customs Act 1901 or the regulations can lead to various civil or criminal consequences. For example, providing false information in an application for a TCO could result in penalties under section 269R of the Act, which may include fines or imprisonment. The maximum penalties for contravening provisions of the Act are set out in the Crimes Act 1914 and can include substantial fines and imprisonment for serious offences. In addition, any person who knowingly or negligently contravenes the Act may be subject to civil penalties, such as fines up to a specified amount determined by the courts. Compliance with the Act and its regulations is critical to avoid these consequences.