EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0710729
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.
The Trustee for the B & D Grey Family Trust No 1 applied for a TCO in respect of certain toolbox locks on 09 July 2007.
Instrument
TCO No 0710729 was made on 21 September 2007. It declares that those certain toolbox locks 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. 0710729 is taken to have come into force on 09 July 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 Australian Parliament, provides a framework for the regulation of customs and excise duties, including the imposition of tariffs on imported goods. Part XVA of the Act establishes a scheme whereby Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. This scheme was introduced to address the need for tariff concessions that can be applied to specific goods under certain conditions. The primary objective of this mechanism is to facilitate the importation of goods by reducing or eliminating customs duties where appropriate, thereby supporting trade and economic activity. TCO No. 0710729, made on 21 September 2007, is an example of such a concession applied to certain toolbox locks, reducing the duty rate from 5% to free, effective from 09 July 2007. The process involves an application to the CEO, assessment against core criteria, and publication of the decision in the Gazette, ensuring transparency and opportunity for public comment.
Scope and Application
The Customs Act 1901, as amended through Tariff Concession Instrument No. 0710729, facilitates the application of lower rates of customs duty on specified goods through the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This instrument applies to any person or entity that imports or intends to import goods eligible for a TCO, provided such goods do not fall under the categories specified in section 269SJ of the Act which are ineligible for tariff concessions. The scope of the Act extends to all industries and transactions involving the importation of goods, thereby impacting a broad range of importers and entities involved in international trade. The jurisdictional reach of this legislation is national, as it is a Commonwealth Act, applicable across Australia. The Act does not specify exclusions or exemptions beyond those already mentioned, and its application can be further extended or restricted through subordinate instruments, such as regulations or further legislative amendments.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0710729 under the Customs Act 1901 (section 269C, 269B, 269D, 269E, 269P, and 269SJ) establish a framework through which the Chief Executive Officer of Customs (CEO) can grant Tariff Concession Orders (TCO). This instrument, specifically TCO No. 0710729, applies to certain toolbox locks and declares that these goods are subject to a free rate of duty, rather than the general rate of 5%. The instrument is effective from the date the application was lodged, which is 9 July 2007. Section 269SJ outlines the types of goods that cannot be subject to a TCO, and since the toolbox locks do not fall under these categories, the application was deemed valid.
The obligations imposed by the Act on the parties involved are primarily centred around the application process and the criteria that must be met for a TCO to be granted. According to section 269F, an applicant must submit an application to the CEO, who then assesses whether the application meets the core criteria set out in section 269C. If the CEO is satisfied that no substitutable goods are produced in Australia in the ordinary course of business, a TCO can be issued. Section 269K requires the CEO to publish a notice in the Gazette inviting submissions from any person who may have objections to the TCO being granted. In this instance, no objections were received.
Failure to comply with the provisions of the Customs Act 1901 can lead to various consequences. The Act does not specify particular offences or penalties for breaches of the TCO provisions. However, any action taken in contravention of the Act could potentially be subject to the general penalties outlined in the Act, which may include fines and imprisonment. The severity of these penalties would depend on the specific breach and the discretion of the court. Additionally, the Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the issuance of a TCO, and no new liabilities are imposed on any person as a result of the TCO.