EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0717641
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 self rising hinges on 16 October 2007.
Instrument
TCO No 0717641 was made on 30 January 2008. It declares that those certain self rising hinges 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 10%. 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. 0717641 is taken to have come into force on 16 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 was enacted by the Parliament of Australia to provide for the regulation of customs and excise duties, including the administration of tariffs and the facilitation of trade. The Act was introduced to address the need for a structured and comprehensive legal framework governing the imposition and collection of customs duties, the regulation of imports and exports, and the enforcement of related laws. As part of this legislative scheme, the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can provide tariff concessions on specified goods. This mechanism aims to support Australian industries by reducing the customs duty on certain goods, provided they meet specific criteria, thereby encouraging production and trade. The policy objective underpinning the creation of TCOs is to foster economic growth and support domestic industries by making imported goods more competitively priced, thus benefiting both businesses and consumers.
Scope and Application
The Tariff Concession Instrument No. 0717641 under the Customs Act 1901 applies to individuals or entities that seek tariff concessions for specific goods they intend to import into Australia. The instrument specifically targets self-rising hinges, as applied in the case of Allan Marketing Group Pty Ltd, where a lower rate of customs duty was granted. This applies to the general category of importers and businesses involved in the importation of these goods, thereby reducing their customs duty liability. The application of this Act is confined to the Commonwealth level, operating within the legislative framework of Australia's customs duties. The Act provides clear criteria that must be met for an application to be considered, notably that no substitutable goods should be produced in Australia, thereby ensuring that the concessions are granted in circumstances where local production does not exist. Any exclusions are outlined in section 269SJ of the Customs Act 1901, which specifies goods that cannot be subject to a TCO. The scope of the Act can be extended or restricted through subordinate instruments, which may include further regulations or amendments made in accordance with the provisions of the Customs Act 1901.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0717641 (sections 269C, 269F, 269K, 269P, 269S) under the Customs Act 1901 permit the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCOs) which apply a lower rate of customs duty to goods specified in the order. For an application to be considered, it must not be in respect of goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, outlined in section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, the CEO must make a written order (a TCO). This TCO declares that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively applying a lower rate of duty. Section 269K mandates that the CEO must publish a notice in the Gazette inviting submissions on the application, while section 269S specifies that a TCO is effective from the date the application was lodged.
Under the Customs Act 1901, the CEO has specific obligations when considering a Tariff Concession Order application. The CEO must ensure that the application is not for goods listed in section 269SJ, which are ineligible for a TCO. If the CEO determines that the application meets the core criteria as per section 269C, they must make a written order declaring the goods subject to the TCO and specifying the applicable rate of duty. The CEO must also publish a notice in the Gazette, inviting any interested parties to submit their views on the application as per section 269K. Failure to adhere to these obligations could result in the improper granting or denial of a TCO, which might lead to legal challenges or disputes regarding the application of customs duties.
Breaches of the provisions set out in the Customs Act 1901 can result in various penalties and consequences. While specific offences and penalties are not detailed in the explanatory statement, non-compliance with the Act’s requirements can lead to legal action against the person or entity involved. For example, if the CEO fails to properly assess an application or make a TCO in accordance with the Act, this could result in judicial review or administrative action. Additionally, any person who knowingly makes a false or misleading statement in an application for a TCO could face criminal charges, as the Act includes provisions for offences related to fraud and misrepresentation. The exact penalties would depend on the nature and severity of the offence but could include fines and imprisonment.