EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507058
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.
Icetech Australia applied for a TCO in respect of certain Dry Ice Blasters on 8 June 2005.
Instrument
TCO No 0507058 was made on 21 October 2005. It declares that those certain Dry Ice Blasters 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. 0507058 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 Customs Act 1901, enacted by the Australian Parliament, established a framework under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to specified goods. This legislative instrument was introduced to address the problem of ensuring fair trade practices and providing relief to industries that do not have Australian-made alternatives. Specifically, it aims to support industries by reducing the duty on imported goods where no equivalent product is manufactured locally. The objective is to promote competition and protect local industries by ensuring that imported goods are not unfairly disadvantaged. The instrument in question, Tariff Concession Instrument No. 0507058, was made on 21 October 2005 and applies to certain Dry Ice Blasters, reducing their duty rate from 5% to 0%. This was effective from 8 June 2005, the date the application was lodged, and does not affect any existing rights or impose any liabilities on non-Commonwealth entities.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs), applies to any individual or entity seeking to import goods that are subject to a lower rate of customs duty than the general rate specified in the Customs Tariff Act 1995. The Act is applicable across the Commonwealth of Australia, providing a national framework for tariff concessions. The process begins when an applicant, such as Icetech Australia in this instance, lodges an application with the Chief Executive Officer of Customs. The CEO evaluates the application against the core criteria outlined in section 269C of the Act, which stipulates that no substitutable goods must be produced in Australia at the time of application. If these criteria are met, a TCO is issued, as seen in the case of Dry Ice Blasters, where the duty rate was reduced from 5% to 0%. The Act ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the issuance of a TCO, and furthermore, it allows for the refund of duties on goods imported since the effective date of the TCO.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0507058, as referenced in the Customs Act 1901, establish the criteria for the creation and operation of Tariff Concession Orders (TCOs). Specifically, section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for TCOs, provided the goods in question are not specified in section 269SJ, which lists those ineligible for TCOs. If the CEO determines that an application meets the core criteria set out in section 269C, they must issue a written TCO, as stipulated in section 269P(3). For example, Instrument TCO No. 0507058 pertains to certain Dry Ice Blasters, applying a 0% duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, as opposed to the general rate of 5%.
The obligations imposed by the Act on the parties involved are primarily centred on the application and approval processes for TCOs. The CEO is required to assess applications under section 269C to determine if no substitutable goods are produced in Australia on the application date, as defined by sections 269D and 269E. Additionally, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting any interested party to submit reasons why the TCO should not proceed, although no such submissions were received in this case. The Act also mandates that TCOs be considered effective from the date the application was lodged (subsection 269S(1)), as demonstrated by TCO No. 0507058, which is effective from 8 June 2005.
Failure to comply with the requirements and obligations set out in the Customs Act 1901 could result in various legal consequences. While the explanatory statement does not detail specific offences or penalties related to breaches of TCO provisions, breaches of customs duties or incorrect tariff applications generally may incur penalties under the Customs Act 1901. These can include fines or imprisonment for individuals found guilty of offences, while corporate entities may face financial penalties. The precise penalties depend on the nature and severity of the breach, as outlined in the broader customs legislation. However, the explanatory statement clarifies that the TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person.