EXPLANATORY STATEMENT
Tariff Concession Instrument No.0413051
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.
Subsea 7 Australia Pty Ltd applied for a TCO in respect of certain marine drive reels on 29 November 2004.
Instrument
TCO No 0413051 was made on 4 February 2005. It declares that those certain marine drive reels 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. 0413051 is taken to have come into force on 29 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 Tariff Concession Instrument No. 0413051 was enacted in 2005 under the Customs Act 1901 to address the need for tariff concessions for specific goods that are not produced domestically. This instrument, introduced by the Australian Government, aims to provide relief to importers by reducing the customs duty on certain marine drive reels, thereby facilitating their affordability and encouraging their import. The instrument was enacted following an application by Subsea 7 Australia Pty Ltd, which sought a concession due to the absence of substitutable goods produced in Australia. The process involved satisfying the core criteria set out in the Act, which includes ensuring that no substitutable goods were being produced domestically, and subsequently publishing a notice in the Gazette to invite objections, none of which were received. The policy objective of this instrument is to support the import of specific goods by reducing their customs duty, thereby enhancing their availability and affordability in the domestic market.
Scope and Application
The Customs Act 1901 provides a framework for the application of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs (CEO) may grant reduced rates of customs duty on certain goods. This mechanism applies to any person or entity that applies for a TCO in respect of goods that are not specified in section 269SJ of the Act and meets the core criteria outlined in sections 269C and 269D. The Act applies to goods that are not substitutable by any goods produced in Australia in the ordinary course of business. The geographic reach of the Act is national, as it applies across all jurisdictions within Australia. The Act also allows for the extension or restriction of its application through subordinate instruments, such as the Customs Tariff Act 1995. The application of this legislation is specifically illustrated by Tariff Concession Instrument No. 0413051, which pertains to marine drive reels and was made effective from 29 November 2004, the date the application was lodged. The TCO does not affect existing rights or impose liabilities on persons other than the Commonwealth.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0413051 (the Instrument) under the Customs Act 1901 (the Act) provide for the creation of Tariff Concession Orders (TCOs) that apply to certain marine drive reels (sections 269C, 269F, 269P(3)). Specifically, section 269F allows for an application to the Chief Executive Officer (CEO) of Customs for a TCO, while section 269C sets out the core criteria that must be satisfied for the CEO to approve such an application. Section 269P(3) mandates that, upon approval, the CEO must issue a written TCO.
The Instrument imposes several obligations on the parties it governs. For example, it requires the CEO to ensure that any application for a TCO meets the core criteria as specified in section 269C of the Act. This includes verifying that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged (section 269D, 269E). Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons to oppose the TCO, as required by section 269K(1). The CEO is also required to make the TCO effective from the date the application was lodged, as per section 269S(1).
In terms of the consequences of breach, the Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for failing to comply with the requirements of a TCO. However, non-compliance with customs regulations generally can result in various penalties. For instance, under the Customs Act 1901, penalties may include fines and, in some cases, imprisonment for serious violations. The specific penalties depend on the nature and severity of the breach.
For this particular Instrument, the TCO does not disadvantage any person or impose liabilities in respect of actions taken before the date of registration (subsection 269S(1)). It is designed to benefit importers by allowing them to apply for a refund of duty on goods imported since the TCO came into effect. Thus, while there are no direct penalties for breach of the TCO itself, any failure to comply with broader customs regulations could result in penalties as prescribed by the Act.