EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0717321
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.
Allan Marketing Group Pty Ltd applied for a TCO in respect of certain door bells on 11 October 2007.
Instrument
TCO No 0717321 was made on 30 January 2008. It declares that those certain door bells 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. 0717321 is taken to have come into force on 11 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, establishes a framework for the imposition of tariffs on imported goods, which includes the provision for Tariff Concession Orders (TCOs). These orders, as outlined in Part XVA of the Act, allow the Chief Executive Officer of Customs to apply a lower rate of customs duty on certain goods, subject to specific criteria. This legislative framework was introduced to address the need for a mechanism to provide tariff relief on goods that are not produced domestically, thereby encouraging trade and potentially reducing costs for importers and consumers. The Tariff Concession Instrument No. 0717321, made on 30 January 2008, is an example of such an order, applied to specific door bells, granting them a tariff concession from the general rate of 5% to a rate of free duty. The process involves an application to the CEO, followed by a public consultation period, and the order comes into effect on the date of application lodging. This legislative approach aims to balance the need for tariff revenue with the facilitation of trade and economic efficiency.
Scope and Application
The Customs Act 1901 governs the scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO). The Act applies to any person who may apply to the CEO for a TCO in respect of goods. The Act stipulates that a TCO will apply if the CEO is satisfied that the application meets the core criteria, namely that no substitutable goods were produced in Australia in the ordinary course of business on the day on which the application was lodged. The application process includes publishing a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, though no submissions were received for this particular TCO. The TCO has a retrospective effect from the date the application was lodged, thus benefiting the rights of importers who can apply for a refund of duty on goods imported since that date. The TCO does not disadvantage any person or impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration. The application of this Act extends to the Commonwealth, and no exclusions or thresholds are specified within the provided text. The scope and application of the Act may be further defined through subordinate instruments.
Key Provisions
The primary operative sections of the Customs Act 1901, as modified by Tariff Concession Order (TCO) No. 0717321, pertain to the establishment and implementation of tariff concessions for specific goods. Section 269F allows for the application for a TCO, which must then be evaluated by the Chief Executive Officer (CEO) of Customs under section 269C to determine if the application meets the core criteria. If the CEO is satisfied that the core criteria are met, they must make a written order under section 269P(3) declaring that the goods in question are subject to a prescribed tariff concession. This means that the goods specified in TCO No. 0717321, namely certain door bells, are subject to a reduced rate of customs duty, which in this case is free, as opposed to the general rate of 5% (Schedule 4, Customs Tariff Act 1995).
The Act imposes several obligations and requirements on the parties involved. Firstly, any person who wishes to apply for a TCO must do so under section 269F and provide sufficient information to satisfy the CEO that the application meets the core criteria. The CEO is required to consider these applications carefully and, if satisfied, to make a written order under section 269P(3). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties under subsection 269K(1), although in this case, no submissions were received. Once the TCO is made, the CEO must ensure that the rights of all parties, particularly importers, are protected and that any applicable refunds of duty are processed as per the Customs (Tariff) Regulations 1998.
Breach of the obligations and requirements set out in the Customs Act 1901 can result in both civil and criminal consequences. While the explanatory statement does not specify particular offences under the Act in relation to TCOs, general contraventions of the Customs Act can lead to substantial penalties. Under section 277 of the Act, an individual can be fined up to $22,200 or face imprisonment for up to two years, or both, for a single offence. For a body corporate, the fine can be as high as $111,000. These penalties underscore the importance of compliance with the Act's provisions regarding tariff concessions and the duties of the CEO in administering these concessions.