EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719748
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.
Vinidex Pty Limited applied for a TCO in respect of certain adjustable calibrating sleeves on 27 November 2007.
Instrument
TCO No 0719748 was made on 08 February 2008. It declares that those certain adjustable calibrating sleeves 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. 0719748 is taken to have come into force on 27 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 was enacted by the Australian Parliament to regulate the importation and exportation of goods, among other things, and provides the legal framework for the Australian Customs Service. The Act was introduced to address the need for a comprehensive regulatory scheme governing the administration of customs and excise duties. One of its key provisions is the establishment of a scheme under which Tariff Concession Orders (TCOs) can be made, reducing the customs duty on certain goods. The Tariff Concession Instrument No. 0719748 was introduced to provide a concession on the customs duty for certain adjustable calibrating sleeves, which was initiated by an application from Vinidex Pty Limited. The Chief Executive Officer of Customs, after being satisfied that the application met the core criteria, issued this TCO. The policy objective here is to support Australian businesses by potentially lowering the cost of imported goods, thereby making them more competitive. The instrument came into force on the date of the application, 27 November 2007, and no submissions were received against the making of the TCO.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the provisions for Tariff Concession Orders (TCOs), which are instrumental in determining the customs duty applicable to certain goods. The Act applies to any person or entity seeking a reduction in the duty on goods by applying for a TCO. The authority to make these orders rests with the Chief Executive Officer of Customs, who must ensure the application does not pertain to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The application process requires the applicant to demonstrate that no substitutable goods are produced in Australia at the time of application, a criterion defined under sections 269C, 269D, and 269E of the Act. The geographic reach of this legislation is national, as it pertains to goods entering Australia and the duties imposed by the Customs Tariff Act 1995. The Act also extends its application through subordinate instruments, which can further define terms or outline specific processes for TCOs. Notably, the TCO does not affect the rights of any person as at the date of registration, ensuring that it does not disadvantage existing stakeholders or impose liabilities for actions taken prior to the order's registration.
Key Provisions
The Tariff Concession Order No. 0719748 under the Customs Act 1901 (sections 269C, 269P(3), and 269S) applies to certain adjustable calibrating sleeves, granting them a concession that reduces the customs duty rate from 5% to free. This concession applies as of the date the application for the concession was lodged, which is 27 November 2007 (subsection 269S(1)). The order was made on 8 February 2008, following an application by Vinidex Pty Limited on 27 November 2007. The Chief Executive Officer of Customs must ensure that no substitutable goods were produced in Australia on the day the application was made for the concession to be granted (section 269C). The CEO is also required to publish a notice in the Gazette inviting any person who believes there are reasons the concession should not be granted to lodge a submission (subsection 269K(1)). In this case, no submissions were received, allowing the concession to proceed.
The Act imposes certain obligations on the parties involved. The applicant, in this case Vinidex Pty Limited, must submit an application to the CEO for a Tariff Concession Order if they believe the goods in question qualify for the concession (section 269F). The CEO, upon receiving a valid application, must determine whether the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia (section 269C). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties and consider these submissions before making a decision (subsection 269K(1)). If the CEO is satisfied that the application meets the criteria and no valid submissions are received, they must make a written order granting the concession (subsection 269P(3)).
Breaching the provisions of the Customs Act 1901 can result in various penalties. For instance, knowingly making a false statement or providing false information in an application for a Tariff Concession Order can lead to a civil penalty of up to 10,000 penalty units (section 284-5 of the Crimes Act 1914). Additionally, any person who wilfully obstructs, hinders, or delays an authorised officer in the execution of their duties under the Customs Act may face criminal penalties, including fines and imprisonment (section 269ZZ of the Customs Act 1901). These penalties underscore the importance of compliance with the Act's provisions and the serious consequences of non-compliance.