EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712550
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.
Chemcorp Pty Ltd applied for a TCO in respect of certain false fingernail kits on 6 August 2007.
Instrument
TCO No 0712550 was made on 29 October 2007. It declares that those certain false fingernail kits 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. 0712550 is taken to have come into force on 6 August 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, established a framework through which Tariff Concession Orders (TCOs) could be issued by the Chief Executive Officer of Customs. This was introduced to provide relief from customs duties for certain imported goods, aligning with broader trade policy objectives of the government to facilitate international trade by reducing import costs. This legislative instrument allows for the consideration of applications for tariff concessions on specific goods, provided certain criteria are met, such as the absence of substitutable goods produced domestically. The instrument in question, Tariff Concession Instrument No. 0712550, was made to address an application by Chemcorp Pty Ltd for tariff concessions on certain false fingernail kits. The instrument specifies that these goods are subject to a zero percent duty rate, which is a reduction from the general rate of five percent, and came into effect on the date the application was lodged, 6 August 2007. The process involved public consultation, though no objections were received. The enactment aims to ensure that the rights of importers are protected and potentially enhanced by allowing them to claim refunds on duties paid prior to the concession's effective date.
Scope and Application
The Tariff Concession Instrument No. 0712550, made under Part XVA of the Customs Act 1901, applies specifically to the concession of customs duty for certain false fingernail kits imported into Australia. This instrument was made in response to an application by Chemcorp Pty Ltd on 6 August 2007, and came into force on the same date, in accordance with the provisions of the Act. The application process requires the Chief Executive Officer of Customs to determine if the goods in question are eligible for a tariff concession based on the absence of substitutable goods produced in Australia. The instrument declares that these specific false fingernail kits are subject to a zero percent duty rate, which contrasts with the general rate of five percent for similar goods. The instrument does not disadvantage any existing rights or impose new liabilities on persons other than the Commonwealth, and it ensures that importers can seek duty refunds for goods imported from the effective date of the concession.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0712550 under the Customs Act 1901 include section 269F, which allows an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C specifies that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Subsection 269P(3) mandates that if the CEO is satisfied the application meets these criteria, a written order (a TCO) must be made, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. TCO No. 0712550, made on 29 October 2007, declared that certain false fingernail kits are goods to which item 50 of Schedule 4 to the Tariff applies, with a resulting duty rate of 0%.
The obligations and requirements imposed by the Act on parties and entities it governs include the necessity for the CEO to consider applications for TCOs and to make a decision based on whether the application meets the core criteria as outlined in section 269C. The CEO must also publish a notice in the Gazette, inviting submissions from any person who believes there are reasons why the TCO should not be made, as per subsection 269K(1). The CEO must ensure that the application does not relate to goods specified in section 269SJ, which are ineligible for a TCO. Furthermore, the Act ensures that the rights of importers are beneficially affected, allowing them 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.
Any breach of the obligations or requirements under the Customs Act 1901 and its regulations may lead to civil or criminal consequences. While specific offences and penalties are not detailed in the explanatory statement, breaches of customs laws generally could result in fines and imprisonment, depending on the severity and intent of the breach. For instance, wilfully making a false statement or providing misleading information to the CEO could lead to penalties under section 255 of the Act, which may include substantial fines or imprisonment. The Act also provides for the recovery of unpaid duty and interest through civil proceedings.