EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508690
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.
HIT Equipment Australia Pty Ltd applied for a TCO in respect of certain cutlery dryers and polishers on 04 July 2005.
Instrument
TCO No 0508690 was made on 07 October 2005. It declares that those certain cutlery dryers and polishers 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. 0508690 is taken to have come into force on 04 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 to provide for the administration of customs duties, as well as the control of goods entering and leaving Australia. Among its provisions, Part XVA introduced the mechanism for Tariff Concession Orders (TCOs), enabling the Chief Executive Officer of Customs to apply tariff concessions on specified goods. This mechanism was introduced to address the problem of ensuring that Australian industries remain competitive by providing tariff relief on goods for which no substitutable Australian-produced alternatives exist. The instrument F2005L03158, Tariff Concession Instrument No. 0508690, was made under this authority by the CEO in response to an application from HIT Equipment Australia Pty Ltd for tariff concessions on certain cutlery dryers and polishers. The policy objective of this instrument is to provide relief to importers by reducing the customs duty on these specified goods, thus encouraging their importation and use in Australia.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking tariff concessions on imported goods through Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs. Specifically, this Act allows for reduced customs duty rates on certain goods when no substitutable goods are produced in Australia. The TCO process is initiated when an application is made under section 269F, subject to the core criteria outlined in section 269C, and must exclude goods specified in section 269SJ. The instrument extends nationally, impacting all states and territories within Australia. It is pertinent to note that the TCO does not affect existing rights or impose liabilities on individuals or entities other than the Commonwealth. Furthermore, it does not disadvantage any person or impose liabilities in respect of actions taken prior to the TCO's effective date. The TCO's application can be further detailed or restricted through subordinate instruments, such as regulations, which provide specific operational guidelines or additional criteria for eligibility.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269F, 269P, and 269K of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. Section 269C outlines the core criteria that must be met for a TCO application to be considered valid, specifically requiring that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P mandates that if the CEO is satisfied that the application meets the core criteria, a written order, or TCO, must be made. Lastly, Section 269K requires the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions if they believe the TCO should not proceed. In this case, TCO No. 0508690 was issued following an application by HIT Equipment Australia Pty Ltd for certain cutlery dryers and polishers on 04 July 2005.
The Act imposes several obligations on the parties involved. The CEO must assess whether a TCO application meets the core criteria outlined in section 269C. This includes verifying that no substitutable goods were produced in Australia on the day the application was lodged. The CEO must also publish a notice in the Gazette inviting submissions if the application is accepted as valid, as per section 269K. Importers of the goods subject to a TCO may apply for a refund of duty on goods imported since the TCO is deemed to have come into force, under paragraph 126(1)(r) of the Regulations.
In terms of consequences for breach, the Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for failing to comply with the requirements of a TCO. However, non-compliance with customs regulations generally can result in various penalties, including fines and potential criminal charges. The maximum penalties for breaches of customs laws can vary significantly depending on the nature and severity of the offence. For example, the maximum penalty for fraudulent conduct under section 239 of the Customs Act 1901 can be up to 10 years imprisonment. It is important to note that while the TCO itself does not impose any liabilities on any person, general compliance with customs laws is mandatory and failure to comply can lead to legal repercussions.