EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712629
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.
Vinidex Pty Ltd applied for a TCO in respect of certain rigid plastic pipe saws on 07 August 2007.
Instrument
TCO No 0712629 was made on 12 October 2007. It declares that those certain rigid plastic pipe saws 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. 0712629 is taken to have come into force on 07 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 was enacted to provide a comprehensive framework for the regulation of customs and excise in Australia. It was introduced to address the need for a streamlined and effective system for managing the import and export of goods, including the collection of duties and taxes. Part XVA of the Act, specifically, sets out the provisions for Tariff Concession Orders (TCOs), which are instruments that can lower the customs duty on certain goods under specific conditions. The Tariff Concession Instrument No. 0712629, enacted in 2007, was created to provide a tariff concession for certain rigid plastic pipe saws, as applied by Vinidex Pty Ltd. This concession was made under the authority of the Chief Executive Officer of Customs, who is required to consider applications for TCOs and determine whether they meet the core criteria specified in the Act. The instrument was introduced to ensure that no substitutable goods were produced in Australia at the time of the application, thereby allowing for the concession to be granted. The policy objective of this legislative measure is to support Australian businesses by reducing the cost of importing specific goods, thereby potentially increasing competitiveness and market access.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Orders (TCOs), applies to individuals and entities that engage in the importation of goods into Australia. The Act specifically governs the application process for tariff concessions, which are designed to facilitate trade by reducing or eliminating customs duties on certain goods. The Act is applicable across the Commonwealth of Australia, ensuring a consistent approach to tariff concessions nationwide. The scope of the legislation is primarily focused on the criteria for determining whether a TCO can be granted, including the requirement that no substitutable goods are produced in Australia. The process begins with an application to the Chief Executive Officer of Customs (CEO), who evaluates the application against these criteria. Once a TCO is granted, it applies retroactively from the date the application was lodged, providing relief to importers. The application of TCOs is subject to specific exclusions, such as goods listed in section 269SJ of the Act, which are ineligible for tariff concessions. Furthermore, the Act allows for the CEO to issue subordinate instruments that may extend or restrict the application of the TCOs, ensuring flexibility in managing trade policies.
Key Provisions
The primary sections of the Customs Act 1901 that pertain to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269SJ (subsections 269K(1) and 269S(1)). Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO in relation to specific goods. The CEO must then determine if the application meets the core criteria specified in section 269C, which is based on whether substitutable goods are produced in Australia at the time the application was lodged. If the CEO finds that the application meets the core criteria, they are required under section 269P(3) to issue a written order (the TCO) stating that the goods are subject to a specified rate of customs duty as outlined in the Customs Tariff Act 1995. Additionally, section 269SJ excludes certain goods from being eligible for a TCO. Subsection 269K(1) mandates that the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on whether a TCO should be made. Subsection 269S(1) stipulates that a TCO comes into effect on the day the application is lodged.
The Act imposes several obligations on the parties involved. The CEO must evaluate the validity of TCO applications to ensure they meet the criteria set out in section 269C. This involves confirming that no substitutable goods are being produced in Australia at the time of the application. The CEO must also publish a notice in the Gazette as soon as practicable after accepting an application as valid, inviting any interested parties to lodge submissions. If the CEO is satisfied that the application meets the core criteria, they must issue a written TCO. Furthermore, the Act requires that the TCO does not affect the rights of any person, other than the Commonwealth, in a way that would disadvantage them or impose liabilities for actions taken before the TCO comes into effect.
The Act does not explicitly state any criminal offences or penalties for breaches related to TCOs. However, non-compliance with the requirements of the Customs Act 1901, such as incorrect application of tariff concessions, may result in civil or administrative penalties. For example, under the Customs Act, a person who knowingly or recklessly makes a false statement in connection with a customs matter could be liable for a civil penalty of up to $22,200 for an individual or $111,000 for a body corporate, or both imprisonment for up to two years and/or a fine. Additionally, there could be implications under other relevant legislation, such as the Crimes Act 1914, if the breach involves fraudulent or deceptive conduct.