EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508492
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.
Alcan Gove Development Pty Limited applied for a TCO in respect of certain conveyor drives on 01 July 2005.
Instrument
TCO No 0508492 was made on 16 September 2005. It declares that those certain conveyor drives 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 10%. 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. 0508492 is taken to have come into force on 01 July 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 by the Parliament of Australia to establish a framework for the regulation of customs and excise, including the administration of tariffs and the importation and exportation of goods. The Act was introduced to address the need for a cohesive legal framework governing international trade and to facilitate the collection of duties and taxes on imported goods. The Tariff Concession Instrument No. 0508492 was introduced to provide relief to specific goods that would otherwise incur a higher rate of duty, aligning with the policy objective of fostering economic efficiency and encouraging trade by reducing the cost burden on certain imported goods. This instrument was specifically designed to exempt particular goods from the general duty rate, as outlined in the Customs Tariff Act 1995, thereby benefiting importers who would otherwise be subject to the higher duty rate. The process involves the Chief Executive Officer of Customs evaluating applications to ensure that the concession aligns with the criteria set out in the Customs Act 1901.
Scope and Application
The Customs Act 1901 applies to the application and administration of Tariff Concession Orders (TCOs) through its Part XVA, where the Chief Executive Officer of Customs (CEO) is empowered to grant TCOs that lower the rate of customs duty on specific goods. The Act applies to any person or entity that seeks a TCO for goods not listed in section 269SJ, which specifies goods ineligible for tariff concessions. The geographic reach of this legislation is national, operating under the Commonwealth's authority. The application of a TCO, such as Instrument TCO No 0508492, is retrospective to the date of the application, meaning that the concessional rate applies from the date the application was lodged. The CEO must consider whether the application meets the core criteria, primarily whether substitutable goods are produced in Australia, as defined in sections 269D and 269E. The CEO's decision is subject to public consultation, though no submissions were received for TCO No 0508492. Importantly, the TCO does not retroactively affect the rights or impose liabilities on any person except the Commonwealth, ensuring that any past transactions remain unaffected.
Key Provisions
The main operative sections of this legislation are sections 269C, 269B, 269E, 269D, and 269P(3) of the Customs Act 1901. Section 269C outlines the core criteria that an application for a Tariff Concession Order (TCO) must meet. Specifically, it requires that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods," while sections 269E and 269D provide further definitions pertinent to the application process. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, section 269P(3) mandates that the CEO must make a written order, declaring the goods subject to the TCO application.
The Act imposes several obligations and requirements on the parties involved. Firstly, it mandates that any person who wishes to apply for a TCO must ensure their application meets the core criteria specified in section 269C. This involves demonstrating that no substitutable goods were produced in Australia on the day the application was lodged. Secondly, the CEO is required to publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made. This ensures transparency and allows for any objections to be considered. Lastly, once a TCO is made, the CEO must issue a written order specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods.
There are potential consequences for non-compliance with the Act's provisions. While the explanatory statement does not specify civil or criminal penalties, breaches of the Act or regulations could lead to legal action, fines, or other penalties as prescribed by the relevant statutes. For instance, knowingly providing false information in an application could result in criminal charges under section 274 of the Customs Act 1901, which pertains to false statements and carries a maximum penalty of five years imprisonment. Additionally, any person who imports goods in a way that contravenes the terms of a TCO could face penalties for non-compliance with the Act's requirements.
In summary, the Customs Act 1901 sets out a framework for the creation of Tariff Concession Orders through sections 269C, 269B, 269E, 269D, and 269P(3). These sections outline the criteria for making such orders, define key terms, and detail the process for the CEO to follow. The Act imposes obligations on applicants to ensure their applications meet the core criteria and on the CEO to publish notices and consider submissions. Non-compliance with the Act’s provisions could lead to legal consequences, including potential fines or imprisonment.