EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711688
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.
Tyes4U applied for a TCO in respect of certain tyre flaps on 19 July 2007.
Instrument
TCO No 0711688 was made on 21 September 2007. It declares that those certain tyre flaps 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. 0711688 is taken to have come into force on 19 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 duties, including the imposition of tariff concessions. This Act was introduced to streamline the process of applying for and granting tariff concessions, thereby facilitating trade and reducing the cost of imported goods for businesses and consumers. Specifically, the Act aims to address the need for a more efficient mechanism to apply for tariff concessions, ensuring that the process is transparent and accessible. The policy objective is to enhance the competitiveness of Australian businesses by reducing the cost of imported goods and promoting fair trade practices. The process involves an application to the Chief Executive Officer of Customs, who assesses whether the application meets the core criteria for a tariff concession, such as the absence of substitutable goods produced in Australia. If the application is approved, a Tariff Concession Order is issued, granting a lower rate of customs duty on the specified goods.
Scope and Application
The Customs Act 1901, specifically Part XVA, allows the Chief Executive Officer (CEO) of Customs to create Tariff Concession Orders (TCOs), which reduce customs duty rates for certain goods. The Act applies to any person or entity that may apply for a TCO in respect of goods that are not listed in section 269SJ, which includes goods that are prohibited from receiving tariff concessions. The application must meet the core criteria outlined in section 269C, requiring that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. Geographic jurisdiction is primarily federal, as the Act is a Commonwealth legislation, but it affects all importers within Australia. The Act’s reach is further extended through subordinate instruments, which may include regulations and specific tariff schedules. Exclusions from tariff concessions are explicitly defined in section 269SJ, and there are no additional exemptions or thresholds outlined in the explanatory statement. The commencement date for the TCO is the date the application was lodged, and it does not retroactively affect any rights or liabilities incurred before this date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0711688, under the Customs Act 1901, declare that certain tyre flaps are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, thus granting them a free rate of duty instead of the general rate of 5%. This decision is based on the assessment that no substitutable goods are produced in Australia, fulfilling the core criteria as per section 269C of the Act. This instrument was made on 21 September 2007 and is considered to have come into force on 19 July 2007, the day the application was lodged (sections 269P(3) and 269S(1)).
The Act imposes several obligations and requirements on the parties involved. Firstly, section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) concerning specific goods. The CEO must then evaluate whether the application meets the core criteria outlined in section 269C, which requires that no substitutable goods are produced in Australia on the day the application is lodged. Additionally, section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not proceed. In this instance, the CEO did not receive any submissions.
Failure to comply with the requirements of the Act may result in various consequences. While the explanatory statement does not explicitly detail the specific offences or penalties, the Act itself provides a framework under which breaches may be subject to civil or criminal penalties. The Customs Act 1901 includes provisions for penalties and enforcement actions, which may include fines and other sanctions for non-compliance with the Act's requirements. The exact penalties would depend on the specific nature of the breach and the provisions of the Act and related legislation.