EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721937
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.
Totalrubber Ltd applied for a TCO in respect of certain coupling components on 21 December 2007.
Instrument
TCO No 0721937 was made on 07 March 2008. It declares that those certain coupling components 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. 0721937 is taken to have come into force on 21 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, establishes a framework within which Tariff Concession Orders (TCOs) can be implemented to provide tariff concessions on certain imported goods. The Act aims to facilitate trade by reducing customs duty on goods that are not produced in Australia, thereby encouraging importation and potentially lowering consumer prices. The instrument F2008L01148, Tariff Concession Instrument No. 0721937, was introduced to provide tariff concessions for certain coupling components, aligning with the policy objective of reducing the cost of importing these components by setting their customs duty rate at free, as opposed to the general rate of 5%. This legislative measure ensures that importers can benefit from reduced duties, effective from the date the application was lodged, without imposing any liabilities on them or affecting their pre-existing rights.
Scope and Application
The Tariff Concession Order No. 0721937 under the Customs Act 1901 applies to the concession of customs duty for certain coupling components, specifically those identified by Totalrubber Ltd in their application lodged on 21 December 2007. This legislative instrument was implemented to provide tariff relief for these goods, effective from the date of the application, 21 December 2007. The Act mandates that the Chief Executive Officer of Customs must consider an application for a Tariff Concession Order (TCO) if it does not pertain to goods that are ineligible under section 269SJ, and if the application satisfies the core criteria outlined in sections 269B, 269C, 269D, and 269E. In this instance, the CEO determined that no substitutable goods were produced in Australia, thereby approving the concession which exempts the specified coupling components from the general 5% customs duty, applying a zero rate instead. This order is limited to the goods explicitly mentioned and does not extend to other goods or entities unless specifically included in a subsequent TCO. The CEO's decision is subject to consultation and public notice as per subsection 269K(1), though no submissions were received in response to the notice published in the Gazette.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0721937 under the Customs Act 1901 (section 269F) allow for the application of tariff concessions on specified goods. If an application for a Tariff Concession Order (TCO) is made and the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, a TCO can be made (section 269C). Specifically, section 269P(3) mandates that the CEO must issue a written TCO if the application meets these criteria, which include the absence of substitutable goods produced in Australia (section 269D and section 269E). For the application made by Totalrubber Ltd concerning certain coupling components, the CEO was satisfied that no substitutable goods were produced in Australia, leading to the issuance of TCO No. 0721937, which declared these coupling components as subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free rate for these goods.
The Act imposes several obligations on the parties involved. Firstly, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). Additionally, the CEO must ensure that the application meets the core criteria, which include verifying that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The CEO must also ensure that the goods in question are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. Failure to meet these obligations can lead to non-compliance with the Act.
The Act also outlines specific consequences for breaches. Under the Customs Act 1901, failure to comply with the requirements for a TCO application could result in the non-application of the tariff concession, thereby imposing the standard rate of duty on the goods in question. While the explanatory statement does not specify particular offences or penalties, it is implied that non-compliance with the statutory requirements could lead to legal ramifications, including potential civil or criminal penalties as prescribed by other relevant legislation. The explanatory statement confirms that the TCO does not affect the rights of a person as at the date of registration, thus ensuring that no existing liabilities are imposed by the TCO.