EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804540
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.
Macdonald Johnson applied for a TCO in respect of certain compact sweeper on 29 October 2007.
Instrument
TCO No 0804540 was made on 03 April 2008. It declares that those certain compact sweepers 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. 0804540 is taken to have come into force on 29 October 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 for the regulation of customs duties and provides the legal basis for the creation of Tariff Concession Orders (TCOs) through which certain goods may be subject to reduced rates of duty. The Act was introduced to streamline the process of granting tariff concessions for goods that are not produced domestically, thereby encouraging imports and potentially reducing costs for consumers and businesses. The Tariff Concession Instrument No. 0804540, issued on 3 April 2008, is an example of such a concession, applying to certain compact sweepers, with the aim of ensuring that these goods are subject to a free rate of duty as no substitutable goods are produced in Australia. The instrument was introduced following an application by Macdonald Johnson and was made effective from 29 October 2007, the date the application was lodged. The process involved public consultation as mandated by the Act, though no submissions were received in response to the notice published in the Gazette.
Scope and Application
The Tariff Concession Instrument No. 0804540 under the Customs Act 1901 applies specifically to certain compact sweepers, which Macdonald Johnson applied for a tariff concession on. The Act applies to the Chief Executive Officer of Customs (CEO), who is responsible for determining whether to grant the tariff concession based on the application made by an individual or entity. The scope of this legislation extends to the goods specified in the application, provided they meet the core criteria outlined in the Act, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The geographical reach of this legislation is national, as it pertains to the Commonwealth of Australia and its customs duties. The Act does not impose any liabilities on any person, and it does not disadvantage any person other than the Commonwealth. It allows for the issuance of a TCO which provides for a lower rate of customs duty on the specified goods. The TCO No. 0804540, which came into force on 29 October 2007, declares that the certain compact sweepers are goods to which item 50 of Schedule 4 to the Tariff applies, resulting in a rate of duty of free instead of the general rate of 5%.
Key Provisions
The key operative sections of this legislation (Tariff Concession Instrument No. 0804540) pertain to the Customs Act 1901, specifically under Part XVA, which outlines the process for making Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ. Section 269C requires the CEO to determine whether the application meets the core criteria, which is fulfilled if no substitutable goods were produced in Australia on the day the application was lodged, as defined in section 269D and section 269E. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)).
The obligations and requirements imposed by this Act on the parties or entities it governs are quite specific. The CEO is mandated to assess TCO applications based on the core criteria mentioned earlier. This includes verifying that no substitutable goods were produced in Australia at the time of the application. Once a TCO is made, the CEO must also publish a notice in the Gazette inviting submissions from any person who may have objections to the TCO (subsection 269K(1)). Additionally, the TCO itself must be lodged with the relevant authorities and must not impose any liabilities on any person except the Commonwealth. Importers of the goods subject to the TCO will be able to apply for a refund of duty on goods imported since the date the TCO is deemed to have come into force (paragraph 126(1)(r) of the Regulations).
In terms of offences, penalties, or consequences for breach, the Act does not explicitly outline specific penalties for failing to comply with the TCO provisions. However, non-compliance with customs regulations generally could lead to various civil or criminal penalties. For instance, under section 282 of the Customs Act 1901, penalties for breaches can include fines and, in serious cases, imprisonment. The exact penalties would depend on the nature and severity of the breach, but they could include fines up to a substantial amount and imprisonment for significant violations. The specifics of these penalties would be determined by the courts based on the particulars of each case.