EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0505651
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.
Abby Precast Concrete Pty Ltd applied for a TCO in respect of certain Movers on 12 May 2005.
Instrument
TCO No 0505651 was made on 21 October 2005. It declares that those certain Movers 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 0%.
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. 0505651 is taken to have come into force on 12 May 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 Tariff Concession Instrument No. 0505651, enacted in 2005, was introduced under the Customs Act 1901 to provide tariff concessions for certain Movers, addressing a gap in the duty rates applicable to these goods. The instrument was created to facilitate the import of these Movers by reducing the customs duty from the general rate of 5% to 0%, provided that no substitutable goods were being produced in Australia. This legislative action was taken by the Chief Executive Officer of Customs in response to an application from Abby Precast Concrete Pty Ltd. The policy objective behind the instrument is to support the importation of goods that are not domestically produced, thereby encouraging trade and potentially benefiting importers by allowing them to apply for duty refunds on previously imported goods under certain conditions.
The instrument was published in the Gazette with an invitation for submissions, though none were received. It came into force on the date the application was lodged, 12 May 2005, without affecting the rights or imposing liabilities on any person other than the Commonwealth. The Tariff Concession Order ensures that importers can benefit from the reduced duty rates, thereby enhancing the competitive edge of imported goods in the Australian market.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0505651, applies to individuals and entities seeking tariff concessions on imported goods. Specifically, it concerns applications made to the Chief Executive Officer of Customs for a Tariff Concession Order (TCO) in respect of certain Movers. The Act applies to all persons and entities who import goods that are eligible for a TCO, provided they do not fall under the categories of goods specified in section 269SJ that are ineligible for such concessions. The geographic and jurisdictional reach of this legislation is national, as it pertains to customs and tariffs under Commonwealth law. The Act specifies exclusions for goods that cannot be subject to a TCO, which are detailed in section 269SJ. The application of the Act can be extended or restricted through subordinate instruments, such as regulations under the Customs Tariff Act 1995, which provide further details on the implementation of TCOs and the rates of duty applicable to various goods. The explanatory statement confirms that the TCO, which came into effect on the date of application, benefits importers by reducing the duty rate from the general rate of 5% to 0% for the specified Movers.
Key Provisions
The main operative sections of the legislation are sections 269C, 269B, 269D, 269E, 269P(3), and 269K(1) of the Customs Act 1901. Section 269C sets out the core criteria that a Tariff Concession Order (TCO) application must meet. This includes ensuring that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B defines key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. If the Chief Executive Officer of Customs (CEO) is satisfied that the TCO application meets the core criteria, section 269P(3) requires the CEO to make a written order (a TCO) that specifies the applicable tariff concession. Section 269K(1) mandates that the CEO must publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made.
The obligations and requirements imposed by the Act on the parties and entities it governs include the necessity for applicants to ensure that their TCO applications meet the core criteria specified in section 269C. This involves demonstrating that no substitutable goods were produced in Australia at the time of application. The CEO is required to assess these applications and, if satisfied, make a written TCO. Additionally, the CEO must publish a notice in the Gazette, inviting public submissions on the proposed TCO, as per section 269K(1). If no submissions are received, the CEO can proceed with making the TCO. Importers, once the TCO is in effect, can benefit by applying for a refund of duty on goods imported since the TCO's effective date, under paragraph 126(1)(r) of the Regulations.
The Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for breach of the TCO provisions. However, general legal principles and other related legislation may apply. For example, any misuse of the TCO, such as fraudulently claiming tariff concessions, could potentially lead to penalties under other sections of the Customs Act or related criminal law provisions. The Act ensures that the TCO does not disadvantage any person or impose liabilities in respect of actions taken before the TCO's effective date, safeguarding the rights of affected parties.
In conclusion, the Tariff Concession Instrument No. 0505651, made under the Customs Act 1901, provides specific provisions for granting tariff concessions on certain Movers, reducing the duty rate from 5% to 0%. The Act outlines the criteria for TCO applications, the process for the CEO to assess and publish these applications, and the rights of importers to claim duty refunds. While the Act does not specify particular penalties for breaches, broader legal principles would apply to any unlawful actions related to the misuse of tariff concessions.