EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711364
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 Company Pty Ltd applied for a TCO in respect of certain porcine leather on 13 July 2007.
Instrument
TCO No 0711364 was made on 02 October 2007. It declares that those certain porcine 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. 0711364 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 was enacted by the Australian Parliament to regulate the importation and exportation of goods within Australia, among other things. The Act includes provisions for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply a lower rate of customs duty to specified goods. The Tariff Concession Instrument No. 0711364, made in 2007, addresses the issue of applying tariff concessions to certain porcine leather, where it was determined that no substitutable goods were produced in Australia. The policy objective is to facilitate trade by reducing the duty on specific imported goods, thus benefiting importers by potentially lowering their costs and encouraging the importation of these goods. The instrument was made following an application by NSW Leather Company Pty Ltd and after a period of public consultation where no objections were raised. The TCO came into effect on the date the application was lodged, without retroactively affecting any pre-existing rights or imposing new liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The Act applies to individuals and entities that seek to import goods into Australia and can benefit from reduced customs duty rates if a TCO is issued for those goods. The scope of this legislation encompasses all industries and transactions involving the importation of goods that are eligible for tariff concessions, provided they meet the core criteria stipulated in section 269C of the Act. These criteria require that no substitutable goods are produced in Australia in the ordinary course of business on the date the TCO application is lodged. The geographic reach of the Act is national, applying across the Commonwealth of Australia. However, certain goods, as specified in section 269SJ, are excluded from the scope of a TCO. The Act allows for the application to be extended or restricted through subordinate instruments, such as regulations or further orders made by the CEO. In the case of TCO No. 0711364, certain porcine leathers were granted a tariff concession, resulting in a reduction of the general customs duty rate of 5% to free, effective from the date the application was lodged, 13 July 2007.
Key Provisions
The Tariff Concession Order (TCO) No. 0711364, established under section 269F of the Customs Act 1901, applies to specific porcine leathers and grants a tariff concession that reduces the customs duty from the general rate of 5% to free. This order was made following an application by NSW Leather Company Pty Ltd on 13 July 2007 and was declared effective from the same date as per subsection 269S(1) of the Act. The Chief Executive Officer of Customs (CEO) issued the order on 2 October 2007, confirming that no substitutable goods were being produced in Australia at the time of the application, thereby meeting the core criteria stipulated in section 269C of the Act.
The obligations imposed by this Act on the parties involved primarily include the requirement for NSW Leather Company Pty Ltd to apply for a TCO if they believe their goods qualify under the specified conditions. Once the application is deemed valid, the CEO must ensure that the application meets the core criteria and, if satisfied, proceed to issue a written TCO. Additionally, under subsection 269K(1) of the Act, the CEO is mandated to publish a notice in the Gazette inviting any interested parties to submit their views on why the TCO should not be granted. This ensures transparency and allows for stakeholder input before the final decision is made.
Failure to comply with the provisions of the Customs Act 1901 or the terms of a TCO may result in civil or criminal penalties. While the specific penalties are not detailed in the Explanatory Statement, breaches of the Customs Act typically involve substantial fines and potential imprisonment for serious offences. The exact penalties depend on the nature and severity of the breach, but they are intended to enforce compliance and uphold the integrity of the customs duty system. The Act's provisions are designed to ensure that the tariff concessions are granted fairly and only when the conditions are met, thereby maintaining the balance between facilitating trade and protecting domestic industries.