EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721939
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.
Total Rubber Ltd applied for a TCO in respect of certain quick connect couplings on 21 December 2007.
Instrument
TCO No 0721939 was made on 07 March 2008. It declares that those certain quick connect couplings 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. 0721939 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 Commonwealth Parliament, provides a framework for the regulation of customs and excise, including the imposition of duties and the facilitation of trade. Part XVA of the Act outlines the mechanism for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duty on specified goods under certain conditions. This legislative framework was introduced to address the need for flexible tariff arrangements that can respond to specific trade and economic conditions, thereby supporting Australian industries and facilitating international trade. The policy objective behind the TCOs is to ensure that Australian businesses can access necessary goods at reduced costs, provided that such concessions do not undermine the production of similar goods within Australia. The instrument in question, Tariff Concession Instrument No. 0721939, was made to grant a tariff concession to Total Rubber Ltd for certain quick connect couplings, effective from 21 December 2007, after no objections were raised during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 0721939, made under Part XVA of the Customs Act 1901, applies to individuals and entities seeking tariff concessions for specific goods, in this case, certain quick connect couplings. The application of this Instrument is directed at importers who wish to benefit from reduced customs duty rates on these goods, provided they meet the core criteria specified in the Act. The Instrument’s scope is limited to the goods specified in the application and does not affect the rights of any person other than the Commonwealth, nor does it impose any new liabilities. The geographic reach of this Instrument is national, as it applies to the importation of goods into Australia. The Instrument becomes effective from the date the application was lodged, which in this instance is 21 December 2007, and it does not require any further subordinate legislation to extend or restrict its application.
Key Provisions
The Customs Act 1901 (the Act) allows for the creation of Tariff Concession Orders (TCOs) as outlined in Part XVA, which provides a lower rate of customs duty for goods specified in such orders. Section 269F allows any person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO for particular goods, provided the goods are not listed in section 269SJ as those that cannot be subject to a TCO. If the CEO determines that the application does not pertain to prohibited goods, they must then assess whether the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Definitions for key terms like "substitutable goods" and "goods produced in Australia" are provided in sections 269B, 269D, and 269E of the Act.
The obligations imposed by the Act on the parties involved include the requirement for applicants to submit a valid TCO application that meets the core criteria. The CEO has the responsibility to assess the application against these criteria and, if satisfied, to make a written TCO declaring the goods subject to a lower rate of duty. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties, as stipulated in subsection 269K(1). Additionally, once a TCO is made, the CEO must ensure that the TCO does not affect any rights or impose liabilities on persons other than the Commonwealth in relation to actions taken before the TCO's effective date.
In terms of consequences for breaches of the Act or non-compliance with TCOs, the Explanatory Statement does not explicitly detail offences, penalties, or specific civil or criminal consequences. However, any failure to comply with the provisions of the Act or the terms of a TCO could potentially lead to legal actions for breaches of duty or other related offences. For example, deliberately providing false information in a TCO application could be subject to penalties under other sections of the Customs Act or related legislation. The specific penalties would depend on the nature and severity of the breach and could include fines or other civil or criminal sanctions as prescribed by the relevant laws.