EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1034146
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.
Wonderest Ltd applied for a TCO in respect of certain foam rubber cutting lines on 26 July 2010.
Instrument
TCO No 1034146 was made on 18 October 2010. It declares that those certain foam rubber cutting lines 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. 1034146 is taken to have come into force on 26 July 2010.
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 was enacted by the Parliament of Australia to regulate the importation and exportation of goods and provides a framework for the administration of customs and excise duties. The Customs Act 1901 was introduced to address the need for a comprehensive legal framework governing customs duties and related matters. This Act was established to facilitate international trade, protect domestic industries, and raise revenue for the government. The Tariff Concession Instrument No. 1034146, made under the Customs Act 1901, aims to provide relief on customs duties for certain goods by reducing the duty rates. This was achieved through the establishment of Tariff Concession Orders, which were intended to ensure that the application of customs duties does not unduly burden businesses or consumers while still achieving the policy objectives of the Customs Act. The policy objective behind this instrument is to promote fair trade practices and economic efficiency by reducing the cost of imported goods, thereby benefiting importers and consumers.
Scope and Application
The Tariff Concession Instrument No. 1034146, made under the Customs Act 1901, pertains to the application of Tariff Concession Orders (TCOs) which provide for a reduced rate of customs duty on specified goods. This instrument applies to entities or individuals who seek to import certain foam rubber cutting lines, as exemplified by the application from Wonderest Ltd. The Act applies to goods that are not substitutable by any produced in Australia and which meet the core criteria outlined in the Act, ensuring that the concession does not undermine local production. The geographic reach of this Act is national, as it applies to all imports entering Australia. The scope of the Act is further refined by exclusions for goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The Act’s application can be extended through subordinate instruments, such as regulations, which provide detailed guidance on the implementation and administration of TCOs. The commencement of this particular TCO aligns with the date the application was lodged, ensuring that the benefits apply retroactively from that date.
Key Provisions
The main operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 1034146, focus on the process for granting tariff concessions on certain goods. Section 269F (1) allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) if they believe the goods in question meet the criteria for a concession. Section 269C stipulates that the application meets the core criteria if no substitutable goods are being produced in Australia on the day the application is lodged. Section 269P(3) mandates that if the CEO is satisfied the application meets these criteria, a written TCO must be issued.
The obligations imposed by the Act on the parties involved are primarily administrative. The CEO is required to carefully assess whether the application for a TCO meets the core criteria, specifically whether no substitutable goods are produced in Australia, as outlined in section 269C. Once an application is deemed valid, the CEO must publish a notice in the Gazette, as per section 269K(1), inviting any objections or submissions regarding the proposed concession. Additionally, section 269S(1) states that the TCO will come into effect on the date the application was lodged, in this case, 26 July 2010.
In terms of breaches and penalties, the Act does not explicitly outline specific criminal or civil penalties for non-compliance with the TCO provisions. However, failure to comply with the terms of the TCO could result in the goods being subject to the standard tariff rates, and potentially incurring the higher duty rates that were intended to be avoided. For example, if the concession is not applied correctly, the goods may not be eligible for the reduced duty rate, and the importer could be liable for the higher duty. Additionally, any fraudulent application for a TCO could result in criminal penalties under other sections of the Customs Act or related legislation.