EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507659
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.
Coogee Resources Pty Ltd applied for a TCO in respect of certain ERW Grade Casing on 22 June 2005.
Instrument
TCO No 0507659 was made on 16 September 2005. It declares that those certain ERW Grade Casing 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. 0507659 is taken to have come into force on 22 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 was enacted to regulate the import and export of goods in Australia. The Act provides the legal framework for the imposition of customs duties and the regulation of customs and excise. In 2005, Tariff Concession Instrument No. 0507659 was introduced by the Chief Executive Officer of Customs under the Customs Act 1901 to address the issue of high customs duties on certain goods. The instrument was introduced in response to an application by Coogee Resources Pty Ltd for a Tariff Concession Order (TCO) in respect of certain ERW Grade Casing. The instrument declares that these goods are subject to a reduced rate of customs duty of 0%, down from the general rate of 5%. The policy objective of the instrument is to provide relief to importers of these goods, who will be able to apply for a refund of duty paid on goods imported since the TCO is taken to have come into force.
Scope and Application
The Tariff Concession Instrument No. 0507659, under the Customs Act 1901, applies to goods specified in the application for a Tariff Concession Order (TCO) and involves the Chief Executive Officer of Customs (CEO) determining whether these goods qualify for a reduced customs duty rate. This legislative instrument is applicable to entities or individuals who are importing goods into Australia and who apply for a TCO on behalf of specific goods, ensuring that the goods are not of the type that are ineligible under section 269SJ of the Act. The application process is contingent on the absence of substitutable goods produced in Australia on the day the application is lodged, as outlined in section 269C of the Act. The instrument operates on a national level, affecting customs duties across the Commonwealth of Australia. However, it explicitly excludes goods specified in section 269SJ, which are not eligible for tariff concessions. Furthermore, the application of the TCO does not retroactively affect any rights or liabilities of parties involved in transactions prior to the application date, safeguarding the legal positions of importers and others affected by the tariff concession.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0507659 under the Customs Act 1901 (section 269C, 269B, 269E, 269P) establish the framework for making a Tariff Concession Order (TCO). If the Chief Executive Officer (CEO) of Customs is satisfied that an application for a TCO meets the core criteria, including that no substitutable goods were produced in Australia on the day the application was lodged, the CEO must make a written TCO (section 269P(3)). This particular instrument, TCO No. 0507659, was made on 16 September 2005 and applies a 0% duty rate to certain ERW Grade Casing, which previously carried a 5% duty rate (section 269P(3)). The TCO came into effect on the day the application was lodged, 22 June 2005 (subsection 269S(1)).
The Act imposes several obligations on the parties involved. Firstly, the CEO must determine whether an application meets the core criteria, which requires verifying that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). Should the CEO decide to proceed with the TCO, they must make a written order specifying the reduced duty rate applicable to the goods in question (section 269P(3)). The Act also ensures that the rights of any person other than the Commonwealth are not adversely affected by the TCO (subsection 269S(1)).
Under the Customs Act 1901, failure to comply with the requirements set out in the Act can result in various consequences. However, the explanatory statement does not explicitly outline specific offences or penalties related to breaches of the TCO. Instead, it emphasises that the TCO does not impose any liabilities on any person, including importers, in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)). Importers of goods affected by the TCO can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). Although the explanatory statement does not detail the maximum penalties for breaches, it ensures that the rights of individuals and entities are protected and that the TCO does not impose additional liabilities.