EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0817806
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.
Reliance Worldwide Pty Ltd applied for a TCO in respect of certain compression tools on 14 July 2008.
Instrument
TCO No 0817806 was made on 03 October 2008. It declares that those certain compression tools 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. 0817806 is taken to have come into force on 14 July 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislation aims to address the issue of providing tariff concessions for specific goods, thereby facilitating trade and reducing the financial burden on businesses and consumers. Reliance Worldwide Pty Ltd's application for a TCO concerning certain compression tools on 14 July 2008 led to the issuance of Tariff Concession Instrument No. 0817806 on 3 October 2008. This instrument declared that the specified compression tools would be subject to a free rate of duty, down from the general rate of 5%, as no substitutable goods were produced in Australia at the time of the application. The instrument took effect on the date of the application, 14 July 2008, and did not impose any liabilities on any person, thereby ensuring that the rights of importers were positively impacted, allowing them to apply for duty refunds on goods imported since the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 0817806, under the Customs Act 1901, applies to specific goods, in this case certain compression tools, for which an application has been made for a Tariff Concession Order (TCO). The Act enables the Chief Executive Officer of Customs to grant a TCO, which provides for a lower rate of customs duty on the specified goods, provided that the application meets certain criteria. These criteria include the absence of substitutable goods produced in Australia in the ordinary course of business, as defined under sections 269C, 269D, 269E, and 269F of the Act. The application in question was made by Reliance Worldwide Pty Ltd on 14 July 2008, and the TCO was issued on 3 October 2008, effective from the date of application. The geographic reach of this Act is national, applying across Australia as it pertains to the importation of goods into the country. Notably, the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities for actions taken before the TCO's effective date. The Act also extends its application through subordinate instruments such as the Customs Tariff Act 1995, which sets out the specific duty rates applied to the goods under the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0817806 under the Customs Act 1901 (the Act) are sections 269C, 269P, and 269S. Section 269C (1) of the Act sets out the core criteria for a Tariff Concession Order (TCO) application, which must be met for the Chief Executive Officer of Customs (the CEO) to grant a concession. According to section 269P (3), if the CEO is satisfied that the application meets the core criteria, they are required to issue a TCO. Section 269S (1) specifies that the TCO comes into force on the day the application is lodged. In this case, TCO No. 0817806 was made on 3 October 2008, declaring that certain compression tools are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a free rate of duty instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. Firstly, the CEO must assess whether the TCO application meets the core criteria specified in section 269C of the Act. If the CEO is satisfied that the application meets these criteria, they must make a written TCO (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting the TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1) of the Act). In this instance, no submissions were received.
Breaching the requirements of the Customs Act 1901 can result in various penalties. While the Explanatory Statement does not detail specific penalties for breaches of the TCO, the Act generally provides for both civil and criminal penalties for non-compliance with customs regulations. Civil penalties can include fines, and in more severe cases, criminal penalties may apply, including imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as other relevant provisions of the Act and associated regulations. It is important for parties governed by the Act to adhere to its requirements to avoid such consequences.