EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711363
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.
NSW Leather Co Pty Ltd applied for a TCO in respect of certain goat or kid leather on 13 July 2007.
Instrument
TCO No 0711363 was made on 02 October 2007. It declares that those certain goat or kid leathers 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. 0711363 is taken to have come into force on 13 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, establishes a framework for the regulation of customs and excise in Australia. This Act, particularly through its Part XVA, provides the mechanism for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can lower the customs duty on specified goods, provided certain conditions are met, such as the absence of substitutable goods produced in Australia at the time of application. The enactment of this legislation addresses the need for a structured approach to granting tariff concessions, ensuring that such concessions do not unfairly disadvantage domestic producers or importers. The policy objective of the Act is to facilitate trade by reducing the customs duty on certain goods, thereby supporting economic activities that rely on the importation of these goods. The explanatory statement for Tariff Concession Instrument No. 0711363 highlights the process followed in granting a concession on certain goat or kid leather, illustrating the practical application of the Act’s provisions.
Scope and Application
The Customs Act 1901, through Part XVA, provides the framework for Tariff Concession Orders (TCOs) which can be made by the Chief Executive Officer of Customs to apply lower rates of customs duty on certain goods. This instrument applies to any individual or entity seeking to import specified goods, provided the goods do not fall within the prohibited categories outlined in section 269SJ of the Act. A TCO is contingent upon the core criteria being met, specifically that no substitutable goods are produced in Australia at the time of application. The application process requires the CEO to publish a notice in the Gazette inviting submissions from interested parties, though no submissions were received in this instance. The geographic reach of the Act is national, applying across Australia, and it extends to all industries and entities involved in the importation of goods subject to a TCO. The application of the Act is not limited by state borders and applies uniformly across the Commonwealth. TCOs do not affect the rights of persons, other than the Commonwealth, as at the date of registration, ensuring that existing rights and obligations are preserved. The instrument in question, TCO No. 0711363, specifically applies to certain goat or kid leathers, which are subject to a duty rate of free, as opposed to the general rate of 5%, as no substitutable goods were produced in Australia at the time of application.
Key Provisions
The primary sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) include sections 269F, 269C, 269B, 269D, 269E, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. Section 269C specifies that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B clarifies the meanings of "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) applies. Section 269SJ lists goods that cannot be the subject of a TCO.
The Act imposes specific obligations on both applicants and the CEO. Applicants must ensure that their goods meet the core criteria, which includes proving that no substitutable goods were produced in Australia. The CEO has the responsibility of evaluating applications to determine if they meet these criteria, consulting with relevant parties, and publishing notices in the Gazette to invite submissions from interested parties. If the CEO is satisfied that the application meets the criteria, they must make a TCO. Additionally, the CEO must not impose any disadvantages on persons or liabilities on anyone other than the Commonwealth for actions taken before the TCO comes into force.
Failure to comply with the provisions of the Act can result in various penalties and consequences. Although specific penalties are not detailed in the explanatory statement, breaches of the Customs Act can generally lead to both civil and criminal penalties. Civil penalties may include fines or other financial penalties, while criminal penalties can involve imprisonment or fines, depending on the severity and nature of the breach. The maximum penalties would be determined by the specific nature of the breach and the relevant provisions of the Act or subsidiary legislation.
In summary, the Tariff Concession Instrument No. 0711363 under the Customs Act 1901 facilitates the application for tariff concessions on specific goods. The Act lays out the criteria for such concessions, the obligations of applicants and the CEO, and the potential consequences for non-compliance. The TCO No. 0711363 specifically applies to certain goat or kid leathers, setting their duty rate at free, which contrasts with the general 5% duty rate.