EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508313
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.
Greif Australia Pty Ltd applied for a TCO in respect of certain Steel Drum Plugs on 27 June 2005.
Instrument
TCO No 0508313 was made on 9 September 2005. It declares that those certain Steel Drum Plugs 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. 0508313 is taken to have come into force on 27 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 importation and exportation of goods in Australia, including the imposition of customs duties. The Tariff Concession Instrument No. 0508313 was introduced in 2005 to address the issue of applying lower rates of customs duty to certain goods under specific conditions, thereby facilitating trade and reducing costs for businesses. The instrument was developed by the Chief Executive Officer of Customs, as per section 269F of the Act, after an application from Greif Australia Pty Ltd for a Tariff Concession Order (TCO) in respect of certain Steel Drum Plugs. The TCO, which came into force on 27 June 2005, grants a zero percent duty rate on these goods, contingent upon the absence of substitutable goods produced in Australia, as outlined in section 269C of the Act. This legislative measure aligns with the policy objective of promoting efficient trade practices while ensuring compliance with Australian customs regulations.
Scope and Application
The Tariff Concession Instrument No. 0508313, made under section 269F of the Customs Act 1901, applies to specific goods identified in the instrument, namely certain Steel Drum Plugs, which are subject to a concession in the rate of customs duty. This instrument is targeted at entities and individuals involved in the importation of these goods, granting them a reduced duty rate of 0% from the date of the application for the concession on 27 June 2005. The Act's jurisdictional reach is federal, applying across Australia as it is an instrument made under Commonwealth legislation. The application of the concession is contingent on the condition that no substitutable goods are produced in Australia at the time of the application, as outlined in section 269C of the Act. Notably, the concession does not impose any liabilities on individuals or entities and does not retroactively affect their rights, while potentially benefiting importers by allowing them to seek refunds on duties paid prior to the concession's effective date.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0508313 under the Customs Act 1901 (section 269F) allow for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application does not pertain to goods specified in section 269SJ, they must evaluate whether the application meets the core criteria outlined in sections 269B and 269C. The CEO must further determine if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are satisfied, the CEO must make a written TCO, declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
The obligations imposed by this Act on the parties and entities it governs are primarily centred around the application process for a TCO. Greif Australia Pty Ltd, for example, must ensure that their application meets the core criteria as specified by sections 269B and 269C. The CEO must publish a notice in the Gazette as soon as practicable after accepting the TCO application as valid and invite any interested parties to lodge submissions (section 269K(1)). Additionally, the CEO must ensure that the TCO does not disadvantage any person other than the Commonwealth or impose any liabilities on any person in respect of actions taken before the date of registration (section 269S(1)).
Breach of the requirements under this Act can lead to various civil or criminal consequences. While the Explanatory Statement does not detail specific offences, the general legal framework under which the Customs Act operates can impose penalties. For instance, under section 269L of the Act, if a person contravenes a TCO or fails to comply with an order made under the Act, they may be liable to a fine, imprisonment, or both. The specific penalties would depend on the nature and severity of the breach. However, it is clear that the Act is designed to ensure that the application and processing of TCOs are conducted with due diligence and in accordance with the legislative requirements.
In summary, the Tariff Concession Instrument No. 0508313 provides a framework for granting tariff concessions on certain goods, ensuring that these concessions do not disadvantage any party and are processed in a transparent and accountable manner. The CEO’s role is pivotal in evaluating applications and making written orders, while the rights of importers are safeguarded to allow for duty refunds. Any breach of the requirements can lead to significant civil or criminal penalties, underscoring the importance of compliance with the legislative provisions.