EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508245
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.
Beaver Sales Pty Ltd applied for a TCO in respect of certain wire rope grips or clips on 24 June 2005.
Instrument
TCO No 0508245 was made on 9 September 2005. It declares that those certain wire rope grips or clips 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. 0508245 is taken to have come into force on 24 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. 0508245, enacted under the Customs Act 1901, addresses the issue of tariff concessions for specific goods by allowing the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs). The Act facilitates a process whereby certain goods can be granted a lower rate of customs duty if they meet specific criteria, primarily by ensuring that no substitutable goods are produced in Australia. This legislative instrument was introduced to provide relief to businesses and consumers by reducing the cost of importing certain goods, thereby enhancing economic efficiency and competitiveness. The instrument was enacted by the relevant executive authority under the authority granted by the Customs Act 1901 and does not impose any liabilities or disadvantage existing rights of non-Commonwealth entities. The primary policy objective is to support economic activity by making imported goods more affordable through tariff concessions, subject to the conditions outlined in the Customs Act 1901.
Scope and Application
The Tariff Concession Instrument No. 0508245 applies to certain wire rope grips or clips and operates under the Customs Act 1901. Specifically, the Act facilitates the application process for Tariff Concession Orders (TCOs) which can result in lower customs duty rates for specified goods. The application for this TCO was made by Beaver Sales Pty Ltd on 24 June 2005, and the TCO was issued on 9 September 2005, following satisfaction by the Chief Executive Officer of Customs that the application met the core criteria and no substitutable goods were produced in Australia at the time of application. The TCO declares that these particular wire rope grips or clips are subject to a free rate of duty, as opposed to the general rate of 5%. The Act extends its application across the Commonwealth of Australia, with no specific exclusions or exemptions mentioned for this TCO, except for those goods specified in section 269SJ of the Act that cannot be subject to a TCO. The geographic reach of this legislation is therefore national, impacting all entities involved in the importation of the specified goods within Australia. Additionally, the Act allows for the extension or restriction of application through subordinate instruments, ensuring flexibility in its application.
Key Provisions
The Customs Act 1901 includes provisions for Tariff Concession Orders (TCOs) under Part XVA, which allow for reduced customs duties on certain goods (s 269F). Section 269C of the Act outlines the core criteria that must be met for a TCO application to be considered, specifically requiring that no substitutable goods were produced in Australia at the time the application was lodged. Section 269D, 269E and 269F define key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods," respectively. If the Chief Executive Officer of Customs (CEO) determines that the application meets these criteria, they must issue a written TCO (s 269P(3)). For example, TCO No. 0508245, made on 9 September 2005, granted a tariff concession for certain wire rope grips or clips, setting their duty rate at free instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO must assess each TCO application against the core criteria and issue a written order if the application is valid (s 269C, s 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from interested parties if they consider there are reasons why the TCO should not proceed (s 269K(1)). In the case of TCO No. 0508245, the CEO did not receive any submissions. The TCO itself does not retroactively affect the rights of any person other than the Commonwealth and does not impose any liabilities (s 269S(1)).
Breaching the requirements set out in the Customs Act 1901 can lead to civil or criminal penalties. The Act does not specify particular offences related to TCO applications; however, general offences under the Customs Act include providing false or misleading information, which can result in fines or imprisonment. For instance, if a party submits a fraudulent application for a TCO, they could face penalties under the relevant sections of the Act. The specific penalties depend on the nature and severity of the breach, but they can include substantial fines or imprisonment terms as determined by the courts.