EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0714204
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.
Jasco Pty Ltd applied for a TCO in respect of certain chair mats on 3 September 2007.
Instrument
TCO No 0714204 was made on 9 November 2007. It declares that those certain chair 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. 0714204 is taken to have come into force on 3 September 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, establishes a framework for the administration of customs and excise duties, and includes provisions for Tariff Concession Orders (TCOs). These orders, introduced to address the need for temporary tariff relief for specific goods, allow the Chief Executive Officer of Customs to grant lower customs duty rates for goods that meet certain criteria, such as the absence of substitutable goods produced in Australia. The policy objective behind these concessions is to provide relief to industries that might otherwise face unfair competitive disadvantages due to the lack of domestic production of certain goods. Tariff Concession Instrument No. 0714204, made on 9 November 2007, is an example of such an order, where the CEO granted a concession for certain chair mats, reducing the duty rate from 5% to 0% upon the application by Jasco Pty Ltd. The process involves public consultation, as mandated by the Act, although in this instance, no submissions were received. The concession came into effect on the date the application was lodged, 3 September 2007, and it does not retroactively affect the rights or liabilities of any person other than the Commonwealth.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs) scheme, applies to individuals or entities seeking tariff concessions on goods imported into Australia. The Act facilitates the reduction of customs duty rates for specified goods by the Chief Executive Officer of Customs, provided that the goods meet certain criteria, such as the absence of substitutable goods produced in Australia in the ordinary course of business. The instrument in question, TCO No. 0714204, pertains to specific chair mats for which a zero per cent duty rate was applied, as no substitutable goods were produced in Australia. This TCO came into effect on the date the application was lodged, 3 September 2007, and benefits importers by allowing them to apply for a refund of duty on goods imported since that date, without imposing any new liabilities. The TCO does not affect the rights of any person other than the Commonwealth, particularly ensuring that no person is disadvantaged or subjected to new liabilities for actions taken before the TCO's registration.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0714204, outline the process and criteria for applying for and granting a Tariff Concession Order (TCO) under the Customs Act 1901. Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. The CEO must determine if the application complies with the core criteria set out in section 269C, which mandates that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO is required to issue a TCO as per section 269P(3), which specifies the lower rate of customs duty applicable to the goods.
The Act imposes certain obligations on the parties involved. The CEO has the responsibility to assess whether the TCO application meets the core criteria and, if so, to issue the TCO. The applicant, such as Jasco Pty Ltd in this case, must ensure that their application for a TCO is substantiated with appropriate evidence demonstrating that no substitutable goods are produced in Australia. Additionally, the CEO must publish a notice in the Gazette (section 269K(1)) inviting submissions from interested parties, although in this instance, no submissions were received.
Under this legislation, breaches of the conditions or failure to comply with the requirements for applying for and issuing a TCO may result in certain consequences. Although the explanatory statement does not specify explicit penalties for non-compliance, the Customs Act 1901 generally provides for penalties for non-compliance with customs-related provisions. Typically, these penalties can include fines and, in severe cases, criminal charges. The exact penalties would depend on the specific nature and severity of the breach.
The TCO No. 0714204, which came into force on 3 September 2007, ensures that the rights of persons other than the Commonwealth are not adversely affected by its implementation. Importers of the specified goods will benefit from the reduced duty rate and may apply for a refund of duty paid on goods imported since the TCO's effective date. Importantly, the TCO does not impose any new liabilities on any person, thereby safeguarding against any retrospective disadvantages.