EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508789
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.
Castech Solutions applied for a TCO in respect of certain line pan castings on 07 July 2005.
Instrument
TCO No 0508789 was made on 16 September 2005. It declares that those certain line pan castings 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. 0508789 is taken to have come into force on 07 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 Australian Parliament to regulate the importation of goods into Australia, among other purposes. The Act provides for the imposition of customs duties and the making of Tariff Concession Orders (TCOs) under Part XVA, which allow for the reduction or exemption of customs duties on certain goods. This legislative framework was introduced to address the need for a structured and fair system of customs duties that could accommodate specific economic circumstances and support industry development by reducing the cost of importing certain goods. The Tariff Concession Instrument No. 0508789, made in 2005, exemplifies the application of this mechanism, granting tariff concessions on specific line pan castings by reducing the duty from 5% to free, reflecting the policy objective of supporting local industries by ensuring that certain imported goods are not subject to prohibitive duties. The process involves the Chief Executive Officer of Customs assessing applications against core criteria and, if satisfied, issuing a written order that comes into force on the date of the application.
Scope and Application
The Tariff Concession Instrument No. 0508789 is an instrument made under Part XVA of the Customs Act 1901, which pertains to Tariff Concession Orders (TCOs). This instrument applies specifically to certain line pan castings and aims to provide tariff concessions on these goods by applying a zero rate of customs duty, in contrast to the general rate of 5% applicable to such goods. The instrument was enacted to benefit the applicant, Castech Solutions, and potentially other importers of these goods, by reducing the financial burden of customs duty. The application of this legislation is limited to the goods specified in the TCO and does not extend to any other goods or industries. It operates within the Commonwealth jurisdiction, as it is an instrument made under federal legislation. The Act does not specify any exclusions or exemptions in the context of this particular TCO, but it does provide a process for considering submissions from interested parties before making the order. The instrument came into effect on the date the application was lodged, 7 July 2005, and does not affect any pre-existing rights or liabilities of individuals or entities, except for the Commonwealth.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, 269P, and 269SJ 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. If the CEO is satisfied that the application meets the core criteria (section 269C), and does not relate to goods specified in section 269SJ, they must make a written order (a TCO) declaring the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P). Section 269SJ specifies goods that cannot be the subject of a TCO.
The obligations imposed on parties by this Act include ensuring that applications for a TCO are made in accordance with section 269F. The CEO must assess whether the application meets the core criteria, as outlined in section 269C, and if satisfied, must issue a written TCO (section 269P). Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)).
Under this Act, there are no direct offences outlined, but there are potential civil and administrative consequences for non-compliance. If the CEO determines that an application does not meet the core criteria, the TCO will not be issued. This means that the applicant would not be entitled to the reduced customs duty rate specified in the TCO. Importers who fail to apply for a refund of duty under paragraph 126(1)(r) of the Regulations may miss out on the benefits of the concession. Furthermore, if the CEO determines that a TCO application is invalid or does not meet the core criteria, the applicant may need to pay the full customs duty on the goods, which could result in financial loss.
The maximum penalties for non-compliance with the Customs Act 1901 are not specified in this particular legislation. However, penalties for breaches of the Customs Act can include fines, imprisonment, or both, depending on the severity of the offence. For example, under section 234 of the Customs Act, a person who contravenes a direction by the CEO can be fined up to 10,000 penalty units (approximately AUD 1.7 million) or imprisoned for up to five years, or both. Additionally, any person who knowingly or negligently makes a false statement in an application for a TCO could be subject to penalties under the False Statements Act 1989, which include fines of up to 10,000 penalty units or imprisonment for up to two years, or both.