EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721765
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.
K D B Engineering Pty Ltd applied for a TCO in respect of certain beds and/or chairs on 19 December 2007.
Instrument
TCO No 0721765 was made on 7 March 2008. It declares that those certain beds and/or chairs 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. 0721765 is taken to have come into force on 19 December 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 administration of customs and excise in Australia. Specifically, Part XVA of the Act facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can result in a lower rate of customs duty for certain goods. The introduction of this Act aimed to streamline the process for tariff concessions, allowing for reduced duty rates for goods that are not produced in Australia and have no substitutable alternatives within the domestic market. The policy objective behind the Act is to support Australian industries by ensuring that domestic products are not unfairly disadvantaged by cheaper imports, while also providing relief to consumers and businesses by potentially lowering the cost of imported goods. Tariff Concession Instrument No. 0721765, enacted in 2008, exemplifies this process by granting a tariff concession on certain beds and chairs, reflecting the legislative intent to balance industrial protection with economic efficiency.
Scope and Application
The Tariff Concession Instrument No. 0721765 applies to the import of certain beds and chairs, specifically those that are the subject of a Tariff Concession Order (TCO) issued under Part XVA of the Customs Act 1901. This legislation allows for the reduction or elimination of customs duties on specified goods if certain criteria are met, such as the absence of substitutable goods produced in Australia. The Act applies to any individual or entity seeking to import the specified goods, and its jurisdiction is federal, operating under the authority of the Commonwealth of Australia. The instrument specifically excludes any goods listed in section 269SJ of the Act, which identifies those that are ineligible for tariff concessions. Additionally, the application of the TCO is contingent on the CEO of Customs determining that the application meets the core criteria outlined in the Act, primarily ensuring that no substitutable goods are produced in Australia at the time of application. The commencement of this TCO is effective from the date the application was lodged, 19 December 2007, and it does not retroactively disadvantage any person or impose liabilities for actions taken prior to its registration.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) as applied in this context, include sections 269C, 269D, 269E, 269F, 269P, and 269SJ. These sections establish the framework for Tariff Concession Orders (TCOs), including the criteria for making such orders, the process for applying for them, and the consequences of their issuance. For instance, section 269F allows for applications to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of certain goods, while section 269C stipulates that 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.
The Act imposes certain obligations on the parties involved. For example, if a TCO application is submitted, the CEO must ensure that the application does not pertain to goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods the subject of the application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Additionally, the CEO must 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.
Failure to comply with the provisions of the Act may result in various penalties or consequences. While the explanatory statement does not specify detailed penalties, breaches of customs regulations generally can result in both civil and criminal penalties. Civil penalties can include fines and the forfeiture of goods, while criminal penalties can include imprisonment and fines, depending on the severity of the breach. The maximum penalties would be determined based on the specific nature of the offence and the provisions of the relevant Acts and Regulations.
In this particular case, the CEO did not receive any submissions in response to the Gazette notice, indicating that there were no objections to the issuance of the TCO. The Tariff Concession Order No. 0721765, which was made on 7 March 2008, applies to certain beds and/or chairs, granting them a duty-free rate under the Customs Tariff Act 1995. This concession is effective from 19 December 2007, the date on which the application was lodged. Importantly, the TCO does not affect the rights of any person other than the Commonwealth or impose any liabilities on any person in respect of actions taken before the date of registration.