EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718781
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.
Chemcorp Pty Ltd applied for a TCO in respect of certain false fingernail kits on 02 November 2007.
Instrument
TCO No 0718781 was made on 30 January 2008. It declares that those certain false fingernail kits 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. 0718781 is taken to have come into force on 02 November 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, established a framework for the application of customs duties, including provisions for Tariff Concession Orders (TCOs) which can reduce the rate of customs duty on specific goods. This Act was designed to address the problem of potentially high customs duties on imported goods that have no locally produced substitutes. By enabling the Chief Executive Officer of Customs to grant TCOs, the Act aims to foster fair competition and support the import of goods that are not produced domestically, thereby enhancing consumer choice and potentially lowering prices. The explanatory statement clarifies that the Tariff Concession Instrument No. 0718781, concerning the concession on certain false fingernail kits, was introduced to provide a zero rate of duty for these goods, effective from the date the application was lodged, in line with the policy objective of ensuring that the application process is transparent and allows for public consultation.
Scope and Application
The Tariff Concession Instrument No. 0718781, under the Customs Act 1901, applies to specific goods, namely certain false fingernail kits, as identified by Chemcorp Pty Ltd in their application to the Chief Executive Officer of Customs (CEO) on 02 November 2007. The Act allows for the creation of Tariff Concession Orders (TCOs) by the CEO for goods that meet certain criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business. The CEO’s decision to issue TCO No. 0718781, effective from 02 November 2007, is based on the finding that no such substitutable goods were produced domestically, leading to the concession that the general rate of duty of 5% on these goods is reduced to free. The Act’s jurisdiction extends nationally, but the application and effect of the TCO are limited to the specific goods identified in the instrument and do not affect any pre-existing rights or liabilities of persons other than the Commonwealth.
Key Provisions
The main operative sections of this legislation focus on the process and criteria for Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269C). Section 269F enables an application to the Chief Executive Officer (CEO) of Customs for a TCO, and section 269SJ specifies the goods that cannot be subject to a TCO. Section 269C stipulates 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) mandates that if the CEO is satisfied that an application meets the core criteria, they must make a written order, declaring the goods to which the TCO applies.
The obligations and requirements imposed by the Act on the parties or entities it governs include the necessity for an applicant to demonstrate that no substitutable goods were produced in Australia when the application for a TCO is lodged. The CEO must then determine whether the application meets the core criteria, which involves assessing the production status of substitutable goods. If the application is approved, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, and the CEO must consider any submissions received. Additionally, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on any person in respect of actions taken before the TCO is registered.
Offences, penalties, or civil/criminal consequences for breach of the Act are not explicitly stated in the provided text. However, failure to comply with the requirements and obligations set forth in the Act, such as submitting false information in a TCO application or not adhering to the stipulated criteria, could potentially lead to legal actions under the Customs Act 1901. The penalties for such breaches would depend on the specific nature of the offence, but could include fines or other legal sanctions. The text does not provide specific maximum penalties but indicates that the TCO does not impose any liabilities on any person.