EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712043
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.
Sperling Enterprises Pty Ltd applied for a TCO in respect of certain non slip mats on 26 July 2007.
Instrument
TCO No 0712043 was made on 9 October 2007. It declares that those certain non slip mats 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 0%.
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. 0712043 is taken to have come into force on 26 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 Tariff Concession Instrument No. 0712043, enacted in 2007 under the Customs Act 1901, addresses the need for a streamlined process to provide tariff concessions on certain goods, ensuring they receive preferential customs duty rates. This instrument was introduced by the Australian Government and aims to facilitate economic benefits for importers by reducing the duty rates on specified goods, thus encouraging trade and potentially lowering the cost of imported goods. The process involves the Chief Executive Officer of Customs reviewing applications and determining if they meet the core criteria, which primarily involves ensuring that no substitutable goods are produced in Australia. This mechanism is designed to protect Australian industries while allowing for tariff reductions where appropriate.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) which provide for lower rates of customs duty on specified goods. This mechanism is available to any person who meets the eligibility criteria and applies to the Chief Executive Officer of Customs (CEO) for a TCO. The CEO is obligated to consider applications where the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from eligibility. For an application to be considered successful, it must meet the core criteria outlined in section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Once the CEO determines that the application meets these criteria, they must issue a written TCO. The application process requires the CEO to publish a notice in the Gazette, inviting any interested parties to submit objections; however, no submissions were received in response to the notice for TCO No. 0712043. The TCO applies retroactively to the date the application was lodged, providing benefits such as the ability to apply for a refund of duty on goods imported since that date, without imposing any new liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of this legislation (F2007L04245) include sections 269C, 269P, and 269SJ of the Customs Act 1901. Section 269C stipulates that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P mandates that if the Chief Executive Officer of Customs (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 applies. Section 269SJ outlines the goods that cannot be subject to a TCO. The TCO No. 0712043 applies item 50 of Schedule 4 to certain non-slip mats, resulting in a zero percent duty rate instead of the general 5 percent rate.
The Act imposes certain obligations on the parties involved. Sperling Enterprises Pty Ltd, the applicant, must ensure that their application for a TCO meets the criteria specified in section 269C of the Act. The CEO of Customs is required to assess the application against these criteria and decide whether to grant the TCO. If the CEO decides to grant the TCO, they must make a written order as per section 269P. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted, as per section 269K. In this case, the CEO did not receive any submissions in response to the published notice.
Failure to comply with the provisions of the Customs Act 1901 may result in various consequences. Although specific offences and penalties are not detailed in this particular TCO, general contraventions of the Customs Act may lead to civil or criminal penalties. Civil penalties could include fines up to a maximum of 10,000 penalty units or, in the case of a corporation, twice the value of the benefit obtained from the contravention. Criminal penalties may include fines up to 100,000 penalty units or imprisonment for up to five years, or both, for an individual, and twice those amounts for a corporation. The exact penalties depend on the nature and severity of the offence.
In this specific case, the TCO No. 0712043 does not affect the rights of any person (other than the Commonwealth) as at the date of registration, nor does it impose any liabilities on any person. Importers of the goods will benefit from the TCO by being able to apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations. The TCO is designed to provide tariff relief to importers without imposing any additional burdens or liabilities on them.