EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708678
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.
Unispan Australia Pty Ltd applied for a TCO in respect of certain scaffolding on 06 June 2007.
Instrument
TCO No 0708678 was made on 17 August 2007. It declares that the certain scaffolding is a product 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. 0708678 is taken to have come into force on 06 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 Tariff Concession Instrument No. 0708678 was enacted in 2007 as part of the Customs Act 1901 to address the need for tariff concessions on certain imported goods that are not produced domestically. This instrument allows the Chief Executive Officer of Customs to grant tariff concessions, resulting in lower customs duties for specific goods. The Customs Act 1901 provides a framework under which these tariff concession orders (TCOs) can be issued, with the primary objective being to ensure that the concession is applicable only when no suitable substitute goods are produced in Australia. The policy objective behind this legislative measure is to facilitate trade and potentially lower costs for businesses importing goods that are not domestically manufactured.
The enactment of this instrument by the Parliament of Australia is designed to streamline the process of applying for and granting tariff concessions, ensuring that the concessions are both fair and economically beneficial. The instrument specifies that the concession applies to certain scaffolding, reducing the general duty rate of 5% to free duty. This change benefits importers by potentially lowering their costs and improving their competitive position in the market. The instrument also ensures that the rights of existing parties are not adversely affected, and it does not impose any new liabilities on individuals or businesses.
Scope and Application
The Customs Act 1901, through its Part XVA, governs the process by which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) to allow for a lower rate of customs duty on certain goods. This Act applies to any person or entity seeking a TCO for goods that are not specified in section 269SJ of the Act, which outlines the goods that cannot be subject to a TCO. The application process requires the applicant to demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, as per sections 269C and 269D. Once the CEO is satisfied that the application meets the criteria, a TCO is issued, which declares that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby altering the duty rate from the general rate to a concessional rate, which in this case is reduced to free duty. The CEO is mandated to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made, although in the case of TCO No 0708678, no submissions were received. The TCO takes effect from the date the application was lodged, without retroactively affecting the rights of any person or imposing liabilities for actions prior to the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0708678 under the Customs Act 1901 (section 269F) allows for the application of a lower rate of customs duty on certain goods, in this case, specific scaffolding, when a Tariff Concession Order (TCO) is granted by the Chief Executive Officer of Customs (CEO). The TCO is issued if the CEO determines that the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. Here, the CEO was satisfied that no such goods were produced in Australia, and hence, a TCO was issued on 17 August 2007, reducing the duty on the scaffolding from the general rate of 5% to free.
The obligations under the Customs Act 1901 include the requirement for the CEO to publish a notice in the Gazette (section 269K(1)) after accepting a TCO application, inviting submissions from any person who believes there are reasons why the TCO should not be made. In this instance, the CEO did not receive any submissions, which facilitated the issuance of the TCO. Additionally, section 269S(1) stipulates that a TCO is to be taken as coming into force on the day on which the application for the TCO was lodged, which for TCO No. 0708678 was 06 June 2007. Importantly, the TCO 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 any liabilities in respect of anything done or omitted to be done before the date of registration.
Any breach of the provisions under the Customs Act 1901 can result in various civil and criminal consequences. While specific offences and penalties are not detailed in the explanatory statement, breaches generally carry substantial penalties. For example, offences under the Customs Act can result in fines up to a maximum of $22,000 for individuals and significantly higher amounts for corporations, as well as potential imprisonment. The exact penalties would depend on the nature and severity of the breach. Furthermore, failure to comply with the Act's requirements can lead to legal actions being taken against the offending party, further exacerbating the financial and legal repercussions.