EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715340
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.
Laminex Pty Ltd applied for a TCO in respect of certain sander dust system on 17 September 2007.
Instrument
TCO No 0715340 was made on 23 November 2007. It declares that those certain sander dust systems 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. 0715340 is taken to have come into force on 17 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 Tariff Concession Instrument No. 0715340, enacted in 2007, is an instrument made under the Customs Act 1901 to address the need for tariff concessions on specific goods. The instrument was introduced to provide relief from customs duty for certain sander dust systems, as applied for by Laminex Pty Ltd, by declaring these goods as tariff-free. The Customs Act 1901, managed by the Commonwealth Parliament, facilitates the application process for tariff concessions through the Chief Executive Officer of Customs. The policy objective is to support Australian businesses by lowering the duty on goods that are not produced domestically, thereby encouraging competitive pricing and market access. This measure benefits importers by potentially allowing them to apply for refunds of duty paid on these goods before the tariff concession took effect.
Scope and Application
The Tariff Concession Instrument No. 0715340 under the Customs Act 1901 applies to the goods specified in the instrument, namely certain sander dust systems, and is administered by the Chief Executive Officer of Customs. This instrument targets entities and individuals involved in the importation of these specific goods, effectively reducing the customs duty from the general rate of 5% to free. The instrument extends to the national jurisdiction, given that it is a Commonwealth instrument. It is important to note that the application of this concession is subject to the conditions outlined in the Customs Act 1901, particularly concerning the absence of substitutable goods produced in Australia, and it does not apply to goods specified in section 269SJ of the Act. The instrument also allows for the possibility of subordinate instruments to further define or modify its application, although no such instruments have been mentioned in this context. The instrument's scope and effect are confined to the specified goods and do not extend to imposing any liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The main provisions of Tariff Concession Instrument No. 0715340 under the Customs Act 1901 (section 269F) allow for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). When the CEO receives an application for a TCO, they must first determine whether the goods in question are specified in section 269SJ, which lists those goods that cannot be subject to a TCO (section 269F). If the goods are not on this prohibited list, the CEO must then decide if the application meets the core criteria set out in section 269C. According to this section, an application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged.
The obligations under this Act require the CEO to make a written TCO if the application meets the core criteria (section 269P(3)). This written order declares that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. For the TCO in question, the CEO was satisfied that no substitutable goods were produced in Australia, and thus, the TCO declares that the certain sander dust systems are subject to item 50 of Schedule 4, with a rate of duty that is free, down from the general rate of 5%.
If any party fails to comply with the provisions of the Customs Act 1901, they may face certain legal consequences. For example, any person who contravenes a provision of the Customs Act may be subject to a penalty. Although the Explanatory Statement does not specify the exact penalties for breach, it is known that under Australian law, penalties can include substantial fines and, in some cases, imprisonment, depending on the severity of the breach. The exact penalties would be determined by the court, taking into account the nature and circumstances of the offence.
In this specific context, if any party fails to adhere to the terms of the TCO, they could potentially face civil or criminal consequences. This might include fines or legal action for non-compliance with the duty concessions provided by the TCO. The CEO may also take action against any party that attempts to circumvent the provisions of the TCO, ensuring that the intended tariff concessions are not abused.