EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508318
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.
Aussie Leisure Mates Pty Ltd applied for a TCO in respect of certain fishing bucket sets on 28 June 2005.
Instrument
TCO No 0508318 was made on 08 November 2005. It declares that those certain fishing bucket sets 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. One submission objecting to the TCO application was received from Alvey Reels Australia.
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. 0508318 is taken to have come into force on 28 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. 0508318 was enacted in 2005 under the Customs Act 1901 to address the need for tariff concessions on specific goods, thereby facilitating trade and reducing the financial burden on importers. This instrument, created by the Chief Executive Officer of Customs, aims to lower customs duty rates for certain fishing bucket sets, as no substitutable goods were produced in Australia at the time of the application. The policy objective is to enhance the competitive edge of Australian businesses by providing tariff relief on goods that are not domestically produced, thus encouraging the importation of these goods. The Tariff Concession Order, effective from the date of application, ensures that importers of these goods can apply for refunds on duties paid before the official registration date, without any imposition of new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0508318, pursuant to Part XVA of the Customs Act 1901, applies to the concession of customs duty rates for certain goods, specifically fishing bucket sets in this case. This Act is applicable to the Chief Executive Officer of Customs, who is responsible for making Tariff Concession Orders (TCOs) when an application is received and deemed valid under the Act. The TCOs affect the duty rates of goods, providing a lower rate if the CEO determines that no substitutable goods are produced in Australia and that the application meets the core criteria. The geographic reach of this Act is national, as it pertains to customs duties applicable across Australia. The Act does not specify exclusions or exemptions beyond those mentioned in section 269SJ, which lists goods that cannot be subject to a TCO. The application of the Act can be further defined through subordinate instruments, which may specify additional criteria or details regarding the application process and implementation of TCOs.
Key Provisions
The primary operative sections of the Customs Act 1901, as relevant to Tariff Concession Orders (TCOs), are sections 269C, 269F, 269P, and 269SJ (subsection 269K(1) also plays a role). Section 269F allows an applicant to request a TCO from the Chief Executive Officer (CEO) of Customs. If the application is not for goods specified in section 269SJ, the CEO must determine if the application meets the core criteria under section 269C. If the core criteria are met, the CEO must make a TCO as outlined in section 269P(3). Section 269K(1) requires the CEO to publish a notice in the Gazette, inviting submissions from any interested parties.
The obligations and requirements imposed by the Act on the parties it governs include ensuring that applications for TCOs are made in accordance with the provisions of section 269F. The CEO must assess each application against the criteria specified in section 269C, ensuring that no substitutable goods are being produced in Australia. This involves a careful examination of what constitutes 'substitutable goods' under section 269D, 'ordinary course of business' under section 269E, and the specific use of the goods in question. If the application meets the criteria, the CEO must issue a TCO as per section 269P(3). Additionally, the CEO must follow the requirement in section 269K(1) to publish a notice in the Gazette, facilitating public consultation before finalising the TCO.
The Act includes provisions for offences, penalties, and consequences for breaches. While the Explanatory Statement does not explicitly mention penalties, breaches of customs regulations generally can lead to civil or criminal penalties. For instance, under the Customs Act, wilful and fraudulent underpayment of duty or tax can lead to criminal charges, with penalties including fines up to $22,000 or imprisonment for up to five years, or both, for individuals, and significantly higher penalties for corporations. Additionally, incorrect or misleading information provided to the CEO can be considered an offence, potentially leading to similar penalties. The specific penalties would depend on the nature and severity of the breach, as outlined in other sections of the Customs Act and related regulations.