EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708211
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.
Vacupack Pty Ltd applied for a TCO in respect of certain pressure formers on 30 May 2007.
Instrument
TCO No 0708211 was made on 17 August 2007. It declares that those certain pressure formers 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. 0708211 is taken to have come into force on 30 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, enacted by the Parliament of Australia, provides a legislative framework within which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) that reduce customs duty on specific goods. This piece of legislation was introduced to address the need for flexibility in customs duty rates to support economic development and trade efficiency by allowing the exemption of certain goods from standard tariff rates. The objective, as stated in the explanatory statement for Tariff Concession Instrument No. 0708211, is to ensure that a TCO can be issued when there are no substitutable goods produced in Australia, thereby benefiting importers by potentially lowering their duty costs and encouraging the importation of these goods.
Scope and Application
The Tariff Concession Instrument No. 0708211 applies to the application for tariff concession orders under the Customs Act 1901. This legislation pertains specifically to goods that are subject to a tariff concession order, which is a lower rate of customs duty. The instrument applies to Vacupack Pty Ltd's application for a tariff concession order in respect of certain pressure formers, which was made on 30 May 2007. The instrument was published in the Gazette on 17 August 2007 and it declares that these certain pressure formers are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies. The instrument does not affect the rights of any person, other than the Commonwealth, as at the date of registration so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected, as they 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 instrument has a national reach, as it applies to the Customs Act 1901 which is a Commonwealth Act. The application for a tariff concession order must be made by a person, and the instrument applies to any entity or industry that produces substitutable goods in Australia. The instrument extends or restricts application through subordinate instruments, which are the Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
The Tariff Concession Instrument No. 0708211, under the Customs Act 1901, allows for a lower rate of customs duty on certain goods, as determined by the Chief Executive Officer of Customs (section 269F). Specifically, it grants a tariff concession order (TCO) for certain pressure formers, reducing their duty rate from 5% to free (section 269P(3)). This concession applies to goods for which no substitutable goods are produced in Australia in the ordinary course of business (section 269C). The CEO must make a written order to implement this concession if the application meets the core criteria (section 269P(3)).
The Act imposes several obligations on parties involved in TCOs. Firstly, applicants must ensure their goods meet the criteria outlined in sections 269C and 269SJ (section 269F). The CEO, in turn, has the duty to assess whether the application meets the core criteria and to make a written order if satisfied (section 269P(3)). The CEO is also required to publish a notice in the Gazette inviting submissions on the TCO application (subsection 269K(1)). This ensures transparency and provides an opportunity for stakeholders to voice any objections or concerns.
Failure to comply with the provisions of the Customs Act 1901, particularly in the context of TCOs, can lead to various consequences. While the explanatory statement does not specify explicit offences, penalties, or criminal consequences, non-compliance could result in the invalidity of the TCO or other administrative actions. Importers, however, have the right to apply for a refund of duty on goods imported since the TCO came into force, which is beneficially affected by the concession (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not impose any liabilities on any person in respect of anything done or omitted before the date of registration.
In summary, the Tariff Concession Instrument No. 0708211 facilitates a tariff reduction for certain pressure formers, provided they meet specific criteria. The Act outlines the obligations of applicants and the CEO, ensuring a transparent and fair process. While specific penalties for non-compliance are not detailed, the rights of importers are protected, allowing them to seek duty refunds under the Regulations.