EXPLANATORY STATEMENT
Tariff Concession Instrument No.0412877
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.
Resident Agent Services Pty Ltd applied for a TCO in respect of certain pelletising lines on 30 November 2004.
Instrument
TCO No 0412877 was made on 11 February 2005. It declares that those certain pelletising 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 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 No0412877 is taken to have come into force on 30 November 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 Parliament of Australia, facilitates the reduction of customs duties on certain goods through the creation of Tariff Concession Orders (TCOs). This piece of legislation was introduced to address the problem of providing tariff concessions for specific goods that are not produced domestically, thereby supporting industries that rely on imports. The Tariff Concession Instrument No. 0412877, made by the Chief Executive Officer of Customs on 11 February 2005, applies a reduced duty rate of 3% on certain pelletising lines, down from the general rate of 5%, as no substitutable goods were produced in Australia at the time of application. The policy objective is to encourage the importation of these goods by making them more competitively priced, thus benefiting the relevant industries and importers without imposing any new liabilities or disadvantaging existing stakeholders.
Scope and Application
The Tariff Concession Instrument No. 0412877, made under the Customs Act 1901, applies to the specific pelletising lines for which Resident Agent Services Pty Ltd applied on 30 November 2004. This legislation facilitates a lower rate of customs duty for these goods, as determined by the Chief Executive Officer of Customs, who must be satisfied that no substitutable goods were produced in Australia on the day the application was lodged. The instrument came into force on the date of the application, 30 November 2004, and establishes that the goods in question are subject to a reduced duty rate of 3%, as opposed to the general rate of 5%. This Act operates within the Commonwealth jurisdiction and affects entities engaged in the importation of the specified goods, thereby benefiting importers who may apply for duty refunds under the Customs Act Regulations. The legislation does not disadvantage any person or impose liabilities on anyone for actions taken before the instrument's effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0412877 include sections 269C, 269F, 269P(3) and 269S of the Customs Act 1901, which detail the process for applying for and making a Tariff Concession Order (TCO) (s 269F). Specifically, section 269F allows an applicant to request a TCO for goods that are not prohibited by section 269SJ. If the Chief Executive Officer of Customs (CEO) is satisfied that the application is valid and that no substitutable goods are produced in Australia, the CEO must make a TCO (s 269P(3)). Section 269C defines the core criteria for a TCO application, which includes the absence of substitutable goods produced in Australia in the ordinary course of business (s 269C). The TCO specifies the goods to which a particular item of the Customs Tariff Act 1995 applies, and sets the rate of customs duty for these goods (s 269P(3)).
The obligations imposed on the parties governed by this legislation include the requirement for applicants to ensure that their TCO applications meet the core criteria specified in section 269C of the Customs Act 1901. The CEO has the obligation to assess the validity of the application, ensure that it complies with the core criteria, and make a TCO if the application meets these criteria. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (s 269K(1)). The TCO specifies that it does not affect the rights of a person as at the date of registration, nor impose any liabilities on any person (s 269S(1)).
The legislation does not specify any offences, penalties, or civil/criminal consequences for breach of the TCO or the Customs Act 1901. However, failure to comply with the requirements of the TCO or the Act could potentially result in the nullification of the TCO, or in legal proceedings being taken against the person or entity that breached the provisions. The penalties for contravening the Customs Act 1901 or the Customs Tariff Act 1995, from which this legislation derives, can include fines and imprisonment, depending on the nature and severity of the offence. For example, under section 247 of the Customs Act 1901, a person who wilfully makes a false statement or representation in relation to goods subject to customs duty can be fined up to 10,000 penalty units or imprisoned for up to five years, or both.