EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712695
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.
Independence Studios Pty Limited applied for a TCO in respect of certain folding polypropylene colanders on 09 August 2007.
Instrument
TCO No 0712695 was made on 12 October 2007. It declares that those certain folding polypropylene colanders 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. 0712695 is taken to have come into force on 09 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 Tariff Concession Instrument No. 0712695 was enacted under the Customs Act 1901, with the aim of addressing a specific gap in the tariff concessions scheme. This legislation was introduced to provide relief from customs duties for certain goods that are not produced domestically, thereby supporting the import of these goods and potentially reducing costs for importers. The instrument was enacted by the Chief Executive Officer of Customs following an application from Independence Studios Pty Limited for tariff concessions on certain folding polypropylene colanders. The policy objective of this measure is to ensure that the application of tariff concessions aligns with the broader economic and trade policy goals of the Commonwealth, by facilitating the import of goods that are not domestically produced and thereby supporting market access and competition.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislative provision applies to individuals or entities seeking a concession on the customs duty payable on specific imported goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The scope of the Act includes all goods that are not listed in section 269SJ of the Act, which specifies goods that are ineligible for tariff concessions. The geographic reach of this legislation is national, given that it falls under the purview of the Commonwealth. The application of the Act is not restricted by state or territory boundaries, thereby ensuring a uniform approach across Australia. The Act allows for the extension and restriction of its application through subordinate instruments, thereby providing flexibility in its implementation. The Tariff Concession Instrument No. 0712695, which was issued on 12 October 2007, exemplifies this process by specifically applying to certain folding polypropylene colanders and setting their duty rate to free, whereas the general rate is 5%. This particular TCO came into force on the date the application was lodged, 9 August 2007, and does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth.
Key Provisions
The Tariff Concession Order No. 0712695, pursuant to section 269F of the Customs Act 1901, allows for a reduced rate of customs duty on certain folding polypropylene colanders. This concession is applicable if the goods are subject to a Tariff Concession Order (TCO) made by the Chief Executive Officer (CEO) of Customs, as per section 269C. The CEO must ensure that no substitutable goods are being produced in Australia before making such an order, in line with section 269P(3). In this case, the CEO determined that no such substitutable goods were produced in Australia and subsequently issued the TCO, which came into effect on the date the application was lodged, 09 August 2007.
The obligations under this TCO are primarily on the CEO, who must assess whether the application for the concession meets the core criteria specified in section 269C. This involves confirming that no substitutable goods are produced in Australia and ensuring that the goods in question are not those specified in section 269SJ, which are ineligible for a TCO. Additionally, the CEO is mandated to publish a notice in the Gazette under subsection 269K(1) to invite any interested parties to submit their views on whether the TCO should proceed. The CEO’s decision must be made in writing and the TCO must be issued if the criteria are met.
Failure to comply with the provisions of the Customs Act 1901 or the terms of a TCO may result in penalties. Although the explanatory statement does not detail specific penalties for non-compliance with TCOs, general penalties under the Customs Act can include fines and imprisonment. For instance, section 250 of the Act provides for penalties for breaches of the Act, including fines of up to $22,200 for individuals and $111,000 for corporations, along with potential imprisonment terms. The severity of the penalties may vary depending on the nature and extent of the breach.
The Tariff Concession Order No. 0712695 ensures that the rights of importers are protected and that they can benefit from the reduced duty rates. Importers can apply for a refund of duty on goods imported since the effective date of the TCO, as stipulated in paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person other than the Commonwealth and does not affect the rights of any person as at the date of registration. This means that any actions or omissions before the TCO’s effective date remain unaffected.