EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716817
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.
Airco Fasteners Pty Ltd applied for a TCO in respect of certain collated staples on 04 October 2007.
Instrument
TCO No 0716817 was made on 14 December 2007. It declares that those certain collated staples 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. 0716817 is taken to have come into force on 04 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 Tariff Concession Instrument No. 0716817, enacted in 2007 under the Customs Act 1901, was introduced to address the need for a streamlined process to provide tariff concessions on specific goods, facilitating trade by reducing customs duty rates. This instrument was created to respond to applications for tariff concessions, such as the one made by Airco Fasteners Pty Ltd for collated staples, ensuring that the application process is efficient and transparent. The instrument was developed by the Chief Executive Officer of Customs, who is mandated by section 269F of the Act to decide on such applications based on core criteria outlined in the Act. The primary policy objective is to provide economic benefits to importers by potentially lowering their duty costs, thereby making imported goods more competitive in the Australian market. The instrument's commencement date aligns with the application date, ensuring that the tariff concession takes effect immediately upon application submission, without imposing any retroactive liabilities on importers or other stakeholders.
Scope and Application
The Customs Act 1901, as amended and supplemented by the Tariff Concession Instrument No. 0716817, pertains to the application and administration of tariff concession orders (TCOs) concerning specific goods imported into Australia. The Act applies to entities or individuals seeking to import goods and to the Chief Executive Officer of Customs (CEO) who is responsible for processing and approving TCO applications. The geographic and jurisdictional reach of this legislation is national, as it pertains to the Commonwealth of Australia and applies to all imports entering the country. The Act allows for the reduction or exemption of customs duty on goods that are not substitutable by locally produced goods, as determined by the CEO. Notably, the Act excludes certain goods from being subject to TCOs, as detailed in section 269SJ. The application and scope of the Act can be further refined through subordinate instruments, which may provide additional criteria or guidelines for TCO applications. The commencement of a TCO is effective from the date of the application, and any existing rights or liabilities of parties other than the Commonwealth are protected as per the Act’s provisions.
Key Provisions
The main operative sections of this legislation, as highlighted in the explanatory statement, are sections 269C, 269F, 269P, and 269S of the Customs Act 1901. Section 269F outlines the process for applying for a Tariff Concession Order (TCO), whereby a person can apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C specifies that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) requires the CEO to make a written TCO if satisfied that the application meets the core criteria. Section 269S sets the date from which a TCO is considered to have come into force.
Under the Customs Act 1901, the CEO has specific obligations when dealing with TCO applications. Upon receiving an application, the CEO must first determine if the goods are excluded from TCO consideration under section 269SJ. If not excluded, the CEO must assess whether the application meets the core criteria as defined in section 269C. If the CEO is satisfied that the application meets these criteria, a written TCO must be issued in accordance with section 269P(3). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as per subsection 269K(1).
Breaching the requirements or obligations under this legislation may result in civil or criminal consequences. Although the explanatory statement does not detail specific penalties, the Customs Act 1901 and related regulations would govern any breaches. Typically, breaches of customs regulations can result in fines, penalties, and potential criminal charges. The maximum penalties would depend on the specific nature and severity of the breach, as outlined in the Customs Act 1901 and the Customs Regulations 1994. For example, penalties can include fines up to a significant amount, imprisonment, or both, depending on the offence.