EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720222
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.
Nylex Industrial Products Pty Ltd applied for a TCO in respect of certain car mats cut loop on 26 November 2007.
Instrument
TCO No 0720222 was made on 29 February 2008. It declares that those certain car mats cut loops 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. 0720222 is taken to have come into force on 26 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, provides a framework for the regulation of customs and excise in Australia. Specifically, Part XVA of the Act establishes a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. These orders allow for a lower rate of customs duty on specified goods, facilitating trade by reducing the cost of importing certain items. The Act was designed to address the need for flexible tariff structures that can respond to specific economic or trade policy objectives. The Explanatory Statement for Tariff Concession Instrument No. 0720222, issued under this Act, clarifies the process by which Nylex Industrial Products Pty Ltd successfully applied for a tariff concession on certain car mats cut loops, resulting in a reduction of the duty rate from 10% to free. This concession was effective from the date of the application, 26 November 2007, and no submissions were received opposing the order, indicating broad acceptance of the tariff adjustment.
Scope and Application
The Tariff Concession Instrument No. 0720222 under the Customs Act 1901 applies to goods specified in the Instrument, namely certain car mats cut loop, which are subject to a lower rate of customs duty as a result of the Tariff Concession Order (TCO) issued by the Chief Executive Officer of Customs (CEO). This Act provides a framework for the CEO to consider and potentially grant tariff concessions on goods where certain conditions are met, including the absence of substitutable goods produced in Australia. The scope of the Act extends to any individual or entity that imports or wishes to import the specified goods, thereby directly affecting those involved in the importation process of these goods. The geographic reach of the Act is national, as it pertains to customs duties and tariff concessions under Australian law. However, the Act excludes goods specified in section 269SJ, which cannot be subject to a TCO. The application of the Act can be further extended or restricted through subordinate instruments, which may provide additional details or conditions on the issuance and enforcement of TCOs.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0720222, provide that the instrument declares certain car mats cut loops as goods subject to a Tariff Concession Order (TCO). Section 269P(3) of the Customs Act 1901 (the Act) mandates that if the Chief Executive Officer of Customs (the CEO) is satisfied that a TCO application meets the core criteria, the CEO must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) applies. In this case, item 50 of Schedule 4 applies to the car mats cut loops, resulting in a rate of duty that is free, whereas the general rate of duty on these goods is 10%.
The Act imposes certain obligations on the parties involved. For instance, under section 269C of the Act, a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Furthermore, section 269K(1) of the Act requires the CEO to publish a notice in the Gazette, inviting 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 for TCO No. 0720222.
The legislation also outlines the consequences for breaches. While the explanatory statement does not specify any criminal or civil penalties for non-compliance with the TCO, it is worth noting that the Act and associated regulations might provide for sanctions in case of improper use of the concession. The CEO’s decision to grant or refuse a TCO application is subject to judicial review under the Administrative Decisions (Judicial Review) Act 1977, providing a mechanism for addressing grievances related to the TCO process.
Additionally, while specific penalties are not mentioned in the explanatory statement, the Customs Act 1901 contains various provisions for penalties and offences related to breaches of customs laws, including fines and imprisonment for serious violations. The maximum penalties can vary significantly depending on the nature and severity of the offence, as outlined in other sections of the Act and associated regulations. For instance, section 228 of the Act provides for a maximum penalty of 10,000 penalty units for offences involving fraudulent or dishonest conduct in relation to customs matters.