EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719792
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.
San Marino Smallgoods applied for a TCO in respect of certain meat massaging machine on 19 November 2007.
Instrument
TCO No 0719792 was made on 01 February 2008. It declares that those certain meat massaging machine 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. 0719792 is taken to have come into force on 19 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 Commonwealth Parliament to regulate the importation of goods into Australia, providing for the collection of customs duty and other charges on imported goods. The Act includes provisions for Tariff Concession Orders (TCOs), which allow for reduced rates of customs duty on certain goods. The problem or gap this legislation addresses is the need to facilitate the importation of goods that are not produced domestically or are not readily substitutable with locally produced alternatives, thereby supporting trade and industry competitiveness. The explanatory statement for Tariff Concession Instrument No. 0719792, made on 1 February 2008, outlines the process by which the Chief Executive Officer of Customs may grant such concessions. In this particular case, San Marino Smallgoods applied for, and was granted, a TCO for certain meat massaging machines, resulting in a tariff concession that reduced the duty rate from 5% to free. This legislative instrument ensures that the rights of importers are protected, allowing them to apply for duty refunds on goods imported since the effective date of the TCO, while not imposing any liabilities on any person.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to individuals or entities who apply for a TCO for certain goods, which must meet the criteria outlined in sections 269C and 269SJ of the Act. Section 269C stipulates that a TCO application can proceed if, on the date of application, there are no substitutable goods produced in Australia in the ordinary course of business. Conversely, section 269SJ lists goods that are ineligible for a TCO, thereby restricting the application of this legislation to those goods not specified therein. The scope of the Act extends across the Commonwealth of Australia, with the TCOs made under its authority being applicable nationwide. Additionally, the Act can be extended or restricted through subordinate instruments, ensuring flexibility in its application. The rights of persons other than the Commonwealth are protected under the Act, ensuring no adverse effects from the TCO on actions or omissions prior to its registration.
Key Provisions
The primary operative sections of this legislation are found under Part XVA of the Customs Act 1901, specifically sections 269C, 269F, and 269P (subsection 3). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria as outlined in section 269C, they must make a written order, a TCO, specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (Tariff). This process is further clarified by the definitions provided in sections 269B and 269D, which define key terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. Once a TCO is made, the specified goods will attract a concessional rate of customs duty, as outlined in the Tariff.
The obligations imposed on the parties governed by this legislation include the requirement for applicants to ensure their TCO applications are not in respect of goods specified in section 269SJ of the Act. The CEO has an obligation to review applications to determine if they meet the core criteria, and if satisfied, to make a TCO. The CEO must also publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission. In this case, the CEO did not receive any submissions. Additionally, the legislation requires that the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration.
The consequences of breaching the provisions of this Act can vary. While the specific offences and penalties are not detailed in the explanatory statement, general principles under the Customs Act 1901 may apply. This could include fines and imprisonment for wilful or negligent breaches. The maximum penalties will depend on the nature and severity of the breach. For example, offences involving the importation of goods without the required duty paid can result in fines of up to $55,000 for individuals and $275,000 for corporations, as well as imprisonment for up to five years. The Customs Act 1901 also provides for civil penalties for non-compliance, which can include financial penalties and the recovery of unpaid duty and taxes.
Overall, this legislation provides a clear framework for the application and granting of Tariff Concession Orders, with specific obligations for both applicants and the CEO. The process is designed to ensure that only eligible goods receive duty concessions, while also protecting the rights of other stakeholders. While the specific penalties for breach are not detailed, the potential for both civil and criminal consequences underscores the importance of compliance with the Act.