EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0710840
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.
Totalrubber Ltd applied for a TCO in respect of certain camlock fittings on 20 December 2007.
Instrument
TCO No 0710840 was made on 7 March 2008. It declares that those certain camlock fittings 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. 0710840 is taken to have come into force on 20 December 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, including the imposition of customs duties. A notable feature of this Act is the inclusion of Part XVA, which establishes a scheme for Tariff Concession Orders (TCOs). These orders are designed to lower the rate of customs duty for specific goods when certain conditions are met. In this context, the Tariff Concession Instrument No. 0710840 was introduced to address the application by Totalrubber Ltd for a TCO in respect of certain camlock fittings. The problem this instrument addresses is the potential for unfair competitive disadvantage faced by Australian producers or importers of these fittings, given that no substitutable goods were produced in Australia at the time of the application. The policy objective, as per the Act, is to ensure that the application of tariff concessions does not disadvantage Australian producers or impose new liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0710840 under the Customs Act 1901 applies to entities or individuals seeking tariff concessions on imported goods, specifically to the case of Totalrubber Ltd's application for certain camlock fittings. This instrument is relevant to the importation of goods into Australia and the application of customs duty rates as specified in the Customs Tariff Act 1995. The instrument is effective within the Commonwealth jurisdiction and applies to those seeking to import or have imported the specified goods since 20 December 2007, the date the application was lodged. The instrument provides that if no substitutable goods were produced in Australia at the time of the application, the goods in question are eligible for a lower rate of customs duty. Notably, the instrument does not affect any pre-existing rights or liabilities of persons other than the Commonwealth, and it allows importers to apply for duty refunds for goods imported since the effective date of the concession.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0710840, under the Customs Act 1901, involve the granting of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO) for specific goods, as outlined in section 269F. The instrument specifies that the CEO must assess whether an application for a TCO meets the core criteria as stipulated in sections 269C and 269P(3) of the Act. If satisfied that the application meets these criteria, the CEO is required to make a written order declaring that the goods in question are subject to a lower rate of customs duty as specified in the Customs Tariff Act 1995.
The obligations imposed on parties under this Act include the requirement for the CEO to conduct a thorough assessment of TCO applications to ensure they meet the core criteria. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged, as defined in section 269D and section 269E of the Act. Additionally, section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions from any interested parties if a TCO application is deemed valid.
In terms of potential breaches and consequences, section 269SJ of the Act identifies goods that are ineligible for a TCO, highlighting the importance of adherence to these specifications. Should an entity or individual knowingly apply for a TCO on ineligible goods, this could result in civil or criminal penalties as outlined in the broader customs legislation. The penalties for non-compliance could include fines or other sanctions as prescribed by the relevant laws. However, specific penalties for this particular instrument are not detailed within the provided explanatory statement.