EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0506272
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.
Bonaparte Diamond Mines NL applied for a TCO in respect of a certain marine diamond sampler and screener on 26 May 2005.
Instrument
TCO No 0506272 was made on 04 November 2005. It declares that those certain marine diamond sampler and screeners 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 free.
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. 0506272 is taken to have come into force on 26 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 Customs Act 1901, enacted by the Australian Parliament, established a framework for the administration of customs duties and provides the authority for the creation of Tariff Concession Orders (TCOs). These orders allow for reduced customs duty rates on specified goods under certain conditions. Specifically, TCO No. 0506272 was introduced to address the application by Bonaparte Diamond Mines NL for tariff concessions on certain marine diamond samplers and screeners. The instrument was made by the Chief Executive Officer of Customs, who determined that no substitutable goods were being produced in Australia at the time, thereby satisfying the core criteria for concession. This tariff concession aims to support the importation of these specific goods by reducing their customs duty rate from the general 5% to free, thus facilitating trade and potentially boosting the relevant industry sector without imposing any additional liabilities on importers or other stakeholders.
Scope and Application
The Tariff Concession Instrument No. 0506272 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions on specified goods, namely marine diamond samplers and screeners in this instance. The process is facilitated by the Chief Executive Officer of Customs, who must ensure that the application meets the core criteria outlined in the Act. The application must also not relate to goods specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. This legislation operates within the Commonwealth jurisdiction and does not extend to state or territory levels. The scope of the legislation is further refined by subordinate instruments, which may expand or restrict the application of the TCOs. The explanatory statement highlights that the TCO does not disadvantage any person by affecting their rights as at the date of registration, nor does it impose any liabilities on any person for actions taken before the registration date. Importers of the specified goods will, however, benefit from the TCO by potentially applying for a refund of duty on goods imported since the date the TCO is taken to have come into force.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0506272 under the Customs Act 1901 (section 269F) allow for the application to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the CEO is satisfied that the application meets the core criteria (section 269C), they must make a TCO. In this case, the TCO was made on 4 November 2005, declaring that certain marine diamond samplers and screeners are subject to a concessionary rate of duty (section 269P(3)). The TCO came into force on the day the application was lodged (section 269S(1)), which is 26 May 2005.
The Act imposes certain obligations on the CEO of Customs, such as the requirement to consider an application for a TCO if it meets the core criteria and to publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). The CEO must also decide whether the application meets the core criteria, which include ensuring that no substitutable goods were produced in Australia in the ordinary course of business at the time of the application (section 269C). In this instance, the CEO was satisfied that the application met the core criteria and made the TCO accordingly.
In terms of penalties and consequences, the Customs Act 1901 does not explicitly state any specific penalties for failure to comply with the requirements of a TCO. However, breaches of the Customs Act generally can lead to civil or criminal penalties, depending on the nature and severity of the breach. For instance, under section 236 of the Customs Act, penalties can include fines and imprisonment for breaches related to customs duties. The maximum penalties for serious breaches can be substantial, reflecting the seriousness of the offence. However, the explanatory statement does not detail specific penalties related to the failure to comply with the TCO process.