EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804324
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.
Australian Defence Apparel Pty Ltd applied for a TCO in respect of certain body armour inserts on 18 March 2008.
Instrument
TCO No 0804324 was made on 6 June 2008. It declares that those certain body armour inserts 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. 0804324 is taken to have come into force on 18 March 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. 0804324 was enacted under the Customs Act 1901 to provide relief from customs duties for specific imported goods. This legislation was introduced to address the problem of high customs duties on certain goods, particularly those for which there are no substitutable products manufactured within Australia. By allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) when certain criteria are met, the Act aims to facilitate the import of goods that are essential but currently not produced domestically, thereby reducing costs and increasing accessibility. The instrument was made on 6 June 2008, following an application by Australian Defence Apparel Pty Ltd for tariff concessions on certain body armour inserts, and it came into effect on 18 March 2008. The policy objective is to support economic efficiency and competitive markets by lowering the duty on specific imported goods where no suitable domestic alternatives exist, ultimately benefiting importers and potentially reducing costs for end-users.
Scope and Application
The Tariff Concession Instrument No. 0804324, made under the Customs Act 1901, applies specifically to certain body armour inserts for which Australian Defence Apparel Pty Ltd applied for tariff concessions on 18 March 2008. This instrument, which came into force on the same date, is designed to grant a concession on the rate of customs duty for these goods, reducing it from the general rate of 5% to free. The Act governs the process by which tariff concessions can be applied for and granted, with the Chief Executive Officer of Customs (CEO) making the final decision based on certain core criteria. Notably, the instrument does not affect the rights of any person, other than the Commonwealth, as they stood on the date of the application, ensuring that no pre-existing rights or liabilities are adversely affected. Additionally, importers of the goods can benefit from this concession by applying for a refund of duty paid on imports since the effective date of the concession.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, 269P, and 269S. Section 269F allows an applicant to request a Tariff Concession Order (TCO) from the Chief Executive Officer (CEO) of Customs. Section 269C outlines the core criteria that must be met for the CEO to approve a TCO, specifically that no substitutable goods are produced in Australia. Section 269P mandates that if the CEO is satisfied that the core criteria are met, they must issue a written TCO. Section 269S establishes that the TCO will be effective from the date the application was lodged.
The Act imposes several obligations on the parties it governs. Firstly, applicants must ensure their TCO applications meet the core criteria specified in section 269C. This includes demonstrating that no substitutable goods are produced in Australia. The CEO of Customs is required to review the application and, if satisfied, issue a TCO as per section 269P. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as per section 269K(1). The CEO must also ensure that the TCO does not disadvantage any person or impose new liabilities, as outlined in section 269S.
Breaching the requirements of the Customs Act 1901 can result in various consequences. While the explanatory statement does not specify offences or penalties for failing to comply with the TCO provisions, general breaches of the Customs Act can lead to civil or criminal penalties. For instance, knowingly making a false statement in a customs document can result in a fine of up to $22,200 for individuals and $111,000 for corporations, as per section 233A. Additionally, failing to comply with a notice or direction from an authorised officer can incur a penalty of up to $5,550 for individuals and $27,750 for corporations, as per section 227D. The penalties are intended to enforce compliance and deter non-compliance with customs regulations.