EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507032
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.
W W Wedderburn Pty Ltd applied for a TCO in respect of certain Weights on 8 June 2005.
Instrument
TCO No 0507032 was made on 21 October 2005. It declares that those certain Weights 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. 0507032 is taken to have come into force on 8 June 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. 0507032 was introduced under the Customs Act 1901 to provide a mechanism for the Chief Executive Officer of Customs to offer tariff concessions on certain imported goods. Enacted in 2005, the instrument aims to address the gap in the tariff system by allowing for a lower rate of customs duty on specified goods, provided certain criteria are met. The process involves an application to the CEO, who must determine whether the application meets the core criteria, specifically that no substitutable goods are produced in Australia. The policy objective is to ensure that the concession is granted in a manner that supports the import of necessary goods without adversely affecting domestic production. The instrument came into force on the date of the application, ensuring that importers of the specified goods can apply for a refund of duty from the commencement date. The Tariff Concession Instrument No. 0507032 provides a streamlined approach for importing specific goods at a reduced tariff, benefiting importers while maintaining the integrity of the domestic industry.
Scope and Application
The Customs Act 1901 applies to individuals and entities involved in the importation of goods into Australia, particularly those seeking tariff concessions on specific items. The Act facilitates the application process for Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs, who reviews applications against core criteria and determines the appropriate tariff rates. The Act operates nationally and allows the CEO to establish lower duty rates on goods specified in a TCO, provided that no substitutable goods are produced in Australia. The process ensures that the application of tariff concessions does not disadvantage existing rights or impose liabilities for actions taken prior to the TCO's registration. The Customs Act's provisions are supplemented by subordinate instruments, such as the Customs Tariff Act 1995, which defines the tariff rates applicable to various goods. The Act does not apply to goods explicitly excluded under section 269SJ, ensuring certain items remain subject to standard duty rates.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0507032 under the Customs Act 1901 (section 269P(3)) mandate that if the Chief Executive Officer (CEO) of Customs is satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria, the CEO must issue a written order declaring that the goods in question are subject to a specified rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995. This particular instrument (section 269P(3)) specifies that certain weights are subject to a 0% duty rate instead of the general 5% duty rate. This concession applies from the date the TCO application was lodged, 8 June 2005, under subsection 269S(1).
Entities or individuals seeking a TCO must meet the core criteria as outlined in sections 269C and 269D of the Customs Act 1901, which include ensuring that no substitutable goods are produced in Australia on the date the application is lodged. The CEO must also publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any interested parties who might oppose the making of the TCO. In this instance, no submissions were received, and thus, the TCO was issued.
Under this legislation, the CEO has a clear set of obligations. Firstly, to ensure that the application for a TCO meets the specified core criteria, particularly in relation to the production of substitutable goods in Australia. Secondly, to publish a notice in the Gazette inviting submissions from interested parties, ensuring transparency and an opportunity for public comment. The CEO must then decide whether to make the TCO based on the application and any submissions received. The CEO must also ensure that the rights of importers are beneficially affected by the TCO, allowing them to apply for a refund of duties on goods imported since the effective date of the TCO.
The Customs Act 1901 imposes both civil and potential criminal penalties for breaches related to the misuse or improper application of TCOs. While the explanatory statement does not explicitly detail penalties for breach, it is implied that failure to comply with the Act’s provisions could lead to legal consequences. These might include fines or other sanctions for misrepresenting facts in an application or for evading duties through improper use of TCOs. The maximum penalties for such breaches would depend on the specific nature of the offence and relevant sections of the Customs Act 1901 and associated regulations.