EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411086
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.
Henry Walker Eltin Contracting Pty Ltd applied for a TCO in respect of certain handlers on 25 October 2004.
Instrument
TCO No 0411086 was made on 7 January 2005. It declares that those certain handlers 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 3%.
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. 0411086 is taken to have come into force on 25 October 2004.
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 administration of customs duties, including provisions for Tariff Concession Orders (TCOs). These orders, issued by the Chief Executive Officer of Customs, allow for the application of a lower rate of customs duty on specified goods. Tariff Concession Instrument No. 0411086, made on 7 January 2005, addresses the problem of ensuring that certain goods eligible for tariff concessions are not being produced domestically in a way that would substitute for imported goods. By confirming that no substitutable goods are being produced in Australia, the instrument ensures that the intended tariff benefits are not undermined. The policy objective is to facilitate the importation of specific goods at a reduced duty rate, thereby supporting economic activities that rely on these imports without disadvantaging domestic producers.
Scope and Application
The Tariff Concession Instrument No. 0411086, which pertains to the Customs Act 1901, applies to entities seeking tariff concessions on specific goods through the application process outlined in the Act. This instrument is relevant to any party applying for a Tariff Concession Order (TCO) on goods where a lower rate of customs duty is sought. The instrument directly impacts the Chief Executive Officer of Customs (CEO) who is responsible for deciding whether to grant the concession based on the core criteria stipulated in the Act, particularly under sections 269C and 269SJ. The instrument’s application is jurisdictional in nature, operating under the Commonwealth’s authority to regulate customs duties. It does not affect the rights of any person other than the Commonwealth regarding actions taken prior to the registration of the TCO, ensuring that the rights of importers are positively affected as they may apply for a refund of duties under the Regulations. The instrument also specifies that it does not impose any new liabilities on any person.
The scope of the instrument is further defined by the exclusion of goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. Additionally, the instrument operates in accordance with the Customs Tariff Act 1995, particularly referencing Schedule 4. Subordinate instruments may extend or further define the application of the TCO, but the primary focus remains on facilitating the concession process for eligible goods by lowering customs duty rates as specified.
Key Provisions
The Tariff Concession Instrument No. 0411086 under the Customs Act 1901 applies a lower customs duty rate to certain handlers as specified in the instrument. Under section 269F, a person can apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. The CEO must then determine whether the application meets the core criteria (section 269C), primarily focusing on whether substitutable goods are produced in Australia in the ordinary course of business (sections 269D and 269E). If the application meets these criteria, the CEO is required to issue a TCO (section 269P(3)). For this particular instrument, the CEO concluded that no substitutable goods were produced in Australia, and thus, the goods specified in the TCO are subject to a lower duty rate of 3%, down from the general rate of 5%.
The Act imposes specific obligations on the CEO, including the requirement to publish a notice in the Gazette inviting submissions from any interested parties if they believe the TCO should not be made (subsection 269K(1)). In this case, no submissions were received. Additionally, the TCO is deemed to come into force on the day the application is lodged (subsection 269S(1)), meaning the concessional tariff for the specified handlers began on 25 October 2004.
Failure to comply with the provisions of the Customs Act 1901 can result in various consequences. While the explanatory statement does not explicitly detail penalties, breaches of customs regulations generally attract severe penalties under Australian law. These can include fines and imprisonment, with the severity depending on the nature and extent of the breach. The Act's provisions ensure that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and it does not impose any new liabilities on individuals or entities.