EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708316
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.
GMCAT Pty Ltd applied for a TCO in respect of certain pressure cleaning kits on 01 June 2007.
Instrument
TCO No 0708316 was made on 17 August 2007. It declares that those certain pressure cleaning kits 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. 0708316 is taken to have come into force on 01 June 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 by the Parliament of Australia to provide for the regulation of customs and excise duties and other matters related to the importation and exportation of goods. One aspect of this legislation is the scheme for Tariff Concession Orders (TCOs) established under Part XVA of the Act. The Tariff Concession Instrument No. 0708316, introduced on 17 August 2007, is an example of such an order, addressing the gap in tariff concessions for specific goods not produced in Australia. This instrument was made to benefit importers of certain pressure cleaning kits by providing them with a lower rate of customs duty, effectively free of charge, as no substitutable goods were produced domestically. The policy objective here is to facilitate the importation of goods that are not manufactured locally, thereby supporting the availability and affordability of these products in the Australian market.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which apply lower rates of customs duty to specified goods. The Act applies to any individual or entity that applies for a TCO, focusing on goods that are not already produced in Australia and do not have substitutable goods within the country. The geographic reach of this legislation is national, applying across Australia. The Act does not apply to goods specified in section 269SJ, which excludes certain items from being subject to a TCO. The application process involves meeting core criteria, including ensuring no substitutable goods are produced in Australia in the ordinary course of business. The TCO made in this instance, Instrument TCO No 0708316, relates to certain pressure cleaning kits, reducing their duty rate to free, effective from the date the application was lodged, 01 June 2007. The CEO is required to publish a notice in the Gazette inviting objections to the TCO application, although in this case, no submissions were received. This instrument does not retroactively affect any rights or impose liabilities on persons other than the Commonwealth, ensuring that the rights of importers are beneficially affected from the date of the TCO’s registration.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0708316, as per the Customs Act 1901, detail the process and conditions for making a Tariff Concession Order (TCO). Section 269F allows a person to apply for a TCO in respect of goods, while Section 269C sets the core criteria that the application must meet, which includes ensuring that no substitutable goods are produced in Australia on the day the application is lodged (Section 269C, 269D, 269E). If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, a written TCO is made, as outlined in Section 269P(3). This TCO declares that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with the duty rate determined by the specified item.
The obligations imposed by this Act on the parties involved are primarily procedural. An applicant must ensure that their application is made in accordance with the criteria set out in Section 269C. The CEO has an obligation to assess the application against these criteria and, if satisfied, to make a TCO as required by Section 269P(3). Furthermore, as per Section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not proceed. This ensures transparency and an opportunity for public input.
Failure to comply with the requirements of the Act can lead to various consequences. While specific offences are not outlined in the explanatory statement, it is implied that non-compliance with the application process or the criteria set out in Section 269C could result in the CEO declining to make a TCO. Importers who benefit from a TCO may face penalties if they do not adhere to the terms and conditions of the concession. For example, if an importer falsely claims eligibility for a duty refund under the TCO, they could face civil or criminal penalties. The maximum penalties for such breaches are not specified in the explanatory statement, but they would typically align with the penalties for fraud or misrepresentation under the applicable laws.