EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0801636
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.
Avon Products Pty Ltd applied for a TCO in respect of certain a frame picking line modules on 29 January 2008.
Instrument
TCO No 0801636 was made on 11 April 2008. It declares that those certain a frame picking line modules 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. 0801636 is taken to have come into force on 29 January 2008.
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 Tariff Concession Instrument No. 0801636, enacted under the Customs Act 1901, addresses the issue of providing tariff concessions to certain goods to promote economic efficiency and competitive advantage. This instrument was introduced to facilitate tariff reductions for specific goods, thereby encouraging importation and usage of these goods in Australia. The instrument was created by the Chief Executive Officer of Customs, as mandated by section 269F of the Customs Act 1901, following an application by Avon Products Pty Ltd for tariff concessions on certain a frame picking line modules. The core objective of this instrument is to ensure that the application of tariff concessions does not negatively impact the rights of existing stakeholders, while also benefiting importers by potentially allowing them to claim refunds on duties paid prior to the concession coming into effect.
Scope and Application
The Tariff Concession Instrument No. 0801636 under the Customs Act 1901 applies to specific goods identified by Avon Products Pty Ltd, namely certain a frame picking line modules. This Act facilitates the application of tariff concessions by the Chief Executive Officer of Customs (CEO) for goods that meet certain criteria, such as the absence of substitutable goods produced in Australia. The application process requires Avon Products Pty Ltd to demonstrate that the goods in question are not already produced domestically in a manner that could substitute for the imported goods. Once the CEO determines that the application meets the core criteria, a Tariff Concession Order (TCO) is issued, granting a lower or free rate of customs duty on these specified goods. This process ensures that the application is transparent and open to public scrutiny, as the CEO is mandated to publish a notice in the Gazette inviting submissions on the application. The TCO in question came into force on the day the application was lodged, 29 January 2008, and it does not retroactively affect the rights of any person or impose any liabilities for actions taken prior to its registration.
Key Provisions
The main operative sections of this legislation, specifically under the Customs Act 1901, pertain to Tariff Concession Orders (TCOs). According to section 269F, any person can apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning certain goods. The CEO is mandated to consider these applications under section 269C, provided the goods do not fall under the categories specified in section 269SJ, which exclude certain goods from being subject to a TCO. A TCO application must meet the core criteria, outlined 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. The definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the CEO is satisfied that these criteria are met, they must issue a written order declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by this Act on the parties or entities it governs include the requirement for any person wishing to apply for a TCO to ensure that the goods in question meet the specified criteria and are not excluded under section 269SJ. The CEO of Customs has the responsibility to evaluate these applications and decide whether they meet the core criteria as outlined in section 269C. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the proposed TCO. If no objections are received, the CEO proceeds to issue the TCO. This process ensures that the application process is transparent and allows for any potential objections to be considered before the TCO is granted.
In terms of consequences for breach, the Customs Act 1901 does not explicitly state offences, penalties, or civil/criminal consequences for failing to comply with the requirements of a TCO application or for any other breaches related to the TCO process. However, any breaches of the Customs Act 1901 in general, such as incorrect declarations or fraudulent activities, could lead to penalties under other sections of the Act. The Tariff Concession Instrument No. 0801636 itself does not specify any penalties for non-compliance with its provisions. Nonetheless, it is essential to note that any misuse of the TCO system or failure to adhere to the conditions set out in the Act could potentially lead to legal consequences under broader customs legislation.