EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508786
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.
Valbruna Australia applied for a TCO in respect of certain Bars and/or Rods on 6 July 2005.
Instrument
TCO No 0508786 was made on 30 September 2005. It declares that those certain Bars and/or Rods 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. 0508786 is taken to have come into force on 6 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 Tariff Concession Instrument No. 0508786 was enacted in 2005 under the Customs Act 1901, with the aim of addressing the specific needs of businesses that import certain goods not produced domestically. The Act, as amended, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which provide for a lower rate of customs duty on specified goods. This was introduced to ensure that Australian businesses and industries can access necessary imports without the burden of high tariffs, thus supporting economic efficiency and competitiveness. The enactment was overseen by the Australian Parliament, reflecting a policy objective to facilitate trade and economic growth by reducing import costs on certain goods. The instrument was made following an application by Valbruna Australia for tariff concessions on certain Bars and/or Rods, resulting in a reduction of the duty rate from 5% to 0%.
Scope and Application
The Customs Act 1901, as amended, provides a framework for the imposition of customs duty on imported goods. Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which can result in a reduction of the customs duty payable on specific goods. An application for a TCO can be made by any person, and if approved by the CEO, the goods in question will be subject to a lower rate of duty. The approval process hinges on the core criteria outlined in the Act, particularly whether no substitutable goods are produced in Australia at the time the application is lodged. The instrument applies nationally across Australia, with the tariff concessions coming into effect from the date the application is lodged. It is important to note that TCOs do not affect any pre-existing rights or liabilities of parties other than the Commonwealth, ensuring that the concessions do not retroactively disadvantage any individual or entity. The scope of the Act is further refined through subordinate instruments, which can specify particular goods or conditions under which the concessions apply.
Key Provisions
The Customs Act 1901, as modified by Tariff Concession Order (TCO) No. 0508786, introduces a scheme under which the Chief Executive Officer of Customs (CEO) can issue Tariff Concession Orders (sections 269C and 269P(3)). These orders allow for a lower rate of customs duty on specific goods, provided the application meets certain core criteria. According to section 269C, an application is valid if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Here, a substitutable good is defined as a product produced in Australia that could serve the same purpose as the goods in question (section 269B and 269D). The CEO must make a written order if satisfied that the application meets these criteria (section 269P(3)). In this case, the CEO was satisfied that no substitutable goods were produced in Australia for certain Bars and/or Rods, resulting in the issuance of TCO No. 0508786, which applies a 0% duty rate to these goods (section 269P(3)).
The obligations imposed by this legislation are primarily on applicants and the CEO. An applicant must ensure their application adheres to the core criteria outlined in section 269C. The CEO, on the other hand, has the responsibility to verify that the application meets these criteria and, if so, to issue the TCO (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made (subsection 269K(1)). In this instance, the CEO did not receive any submissions opposing the TCO (subsection 269K(1)). Once the TCO is issued, it is considered to have come into force on the date the application was lodged (subsection 269S(1)).
Failure to comply with the provisions of the Customs Act 1901 as amended by TCO No. 0508786 could lead to various consequences. While specific offences and penalties are not detailed in the explanatory statement, breaches of the Customs Act generally can result in civil or criminal penalties. Civil penalties may include fines, and in more severe cases, criminal penalties may apply, which could involve imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as any applicable sections of the Customs Act and related regulations.