EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716757
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.
Nicotra Australia Pty Limtied applied for a TCO in respect of certain industrial fans on 03 October 2007.
Instrument
TCO No 0716757 was made on 14 December 2007. It declares that those certain industrial fans 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. 0716757 is taken to have come into force on 03 October 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, provides a framework for the administration of customs and excise in Australia. One of the key mechanisms under this Act is the Tariff Concession Order (TCO), which allows for the reduction of customs duty on specific goods. The 2007 Explanatory Statement for Tariff Concession Instrument No. 0716757 under the Customs Act 1901 addresses a specific application by Nicotra Australia Pty Limited for tariff concessions on certain industrial fans. The primary objective of this legislation is to ensure that the application process for TCOs is transparent and allows for public consultation, while also providing relief to businesses by potentially reducing the customs duty burden on certain imported goods. The explanatory statement details the process followed by the Chief Executive Officer of Customs in assessing and approving the application, ensuring compliance with the core criteria set out in the Act.
Scope and Application
The Customs Act 1901, under Part XVA, enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCO) that apply lower rates of customs duty to specified goods. These orders are applicable to any person or entity seeking a reduction in customs duty for goods that are not currently being produced in Australia in the ordinary course of business, and which do not fall under the list of goods specified in section 269SJ that are ineligible for a TCO. The scope of the Act extends across the Commonwealth of Australia, with the application of the TCO determined by the CEO based on the core criteria outlined in sections 269C, 269B, and 269D of the Act. Any person considering the issuance of a TCO has the opportunity to submit objections following the publication of the application in the Gazette, as per subsection 269K(1) of the Act. In the case of TCO No. 0716757, issued on 14 December 2007, no objections were received, and the TCO came into effect on 3 October 2007, the date the application was lodged. This order specifically applies to certain industrial fans, granting them a duty-free status under item 50 of Schedule 4 to the Customs Tariff Act 1995, which contrasts with the general duty rate of 5%. The TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0716757 are Sections 269C and 269P(3) of the Customs Act 1901. Section 269C specifies that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that a TCO application meets the core criteria, they must make a written order (a TCO) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. In this specific case, the CEO issued TCO No. 0716757, which applies to certain industrial fans and declares that they are subject to item 50 of Schedule 4, with the general duty rate reduced to free.
The Act imposes several obligations on the parties involved. The CEO must ensure that a TCO application meets the core criteria before making the order, as specified in Section 269C. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, as per Section 269K(1), the CEO is required to publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. This notice serves as an opportunity for public consultation. In this instance, the CEO did not receive any submissions in response to the published notice.
Breaches of the provisions outlined in the Customs Act 1901 may lead to various consequences. While the explanatory statement does not detail specific offences, penalties, or consequences for non-compliance with the TCO process, it is reasonable to infer that any misuse of the TCO provisions could result in legal actions under the broader Customs Act. This might include fines or other penalties as stipulated by the relevant sections of the Act. The specific maximum penalties would be determined based on the nature and extent of the breach, adhering to the legal frameworks established under Australian law.