EXPLANATORY STATEMENT
Tariff Concession Instrument No.0501127
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.
Luxfer Gas Cylinders Pty Ltd applied for a TCO in respect of certain seamless cylinders on 24 January 2005.
Instrument
TCO No 0501127 was made on 18 April 2005. It declares that those certain seamless cylinders 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 No0501127 is taken to have come into force on 24 January 2005.
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 regulation of customs and excise within Australia. Specifically, it allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that provide lower rates of customs duty on certain imported goods. This mechanism was introduced to address the need for more flexible and responsive trade policies, particularly to support industries that may face competition from domestically produced substitutable goods. Tariff Concession Instrument No. 0501127, made on 18 April 2005, is an example of such a concession, reducing the duty rate on certain seamless cylinders from 5% to 3%. This particular TCO was made after the CEO confirmed that no substitutable goods were being produced in Australia, thereby meeting the core criteria for such concessions as stipulated under the Customs Act. The policy objective is to facilitate trade by lowering the duty burden on importers, thus potentially increasing the competitiveness of imported goods in the Australian market.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which provide for a lower rate of customs duty on specified goods. This legislative instrument applies to any person or entity seeking to import goods that are not listed in section 269SJ of the Act, which includes goods that are already produced in Australia in a manner that would be substitutable for the imported goods. The Act applies across the Commonwealth of Australia and its territories, affecting the import duties applicable to the specified goods. The TCO mechanism does not impose any liabilities or disadvantage existing rights of persons other than the Commonwealth and is beneficial to importers by potentially allowing them to claim a refund of duty on goods imported since the TCO came into effect. The scope of the TCO can be extended or further defined through subordinate instruments, although in this instance, no additional regulations were applied to the specific TCO.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0501127 under the Customs Act 1901 include section 269C, which specifies that a Tariff Concession Order (TCO) application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269F outlines the process for applying for a TCO, while section 269P(3) mandates that the Chief Executive Officer of Customs (CEO) must make a written order if the application meets these criteria. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties, although in this instance, no submissions were received. The TCO itself is detailed in section 269S, which provides that it comes into force on the date the application was lodged, meaning TCO No. 0501127 took effect on 24 January 2005.
The Act imposes several obligations on the parties involved. The CEO must rigorously evaluate whether a TCO application satisfies the core criteria outlined in section 269C. This includes determining whether substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. The CEO must also publish a notice in the Gazette inviting submissions from interested parties as per section 269K(1). Furthermore, the CEO must ensure that the TCO does not adversely affect the rights of any person other than the Commonwealth in respect of anything done or omitted to be done before the date of registration, as stipulated in the instrument.
Breaching the provisions of the Customs Act 1901 can result in significant legal consequences. Although specific offences and penalties are not detailed in the explanatory statement for TCO No. 0501127, the general framework of the Customs Act provides for both civil and criminal penalties for non-compliance. Civil penalties can include fines up to several thousand dollars, while criminal penalties can include imprisonment and additional fines. The exact penalties depend on the nature and severity of the breach, with the maximum penalties varying based on the specific provisions of the Act violated. Therefore, adherence to the Act's requirements is crucial to avoid these consequences.