EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509091
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.
BOC Ltd applied for a TCO in respect of certain Wire Braided Hoses 12 July 2005.
Instrument
TCO No 0509091 was made on 23 September 2005. It declares that those certain Wire Braided Hoses 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. 0509091 is taken to have come into force on 12 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, enacted by the Parliament of Australia, provides a framework for the administration of customs and excise, including the ability to make Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs (CEO). These orders allow for lower rates of customs duty on certain goods, provided certain conditions are met. The Tariff Concession Instrument No. 0509091 was introduced to address the specific case of BOC Ltd's application for tariff concessions on certain Wire Braided Hoses. The CEO was satisfied that these goods met the criteria for a TCO, as no substitutable goods were produced in Australia at the time of the application, resulting in a duty rate reduction from 5% to 0% for these hoses. This instrument was designed to ensure that the rights of importers are positively impacted and no liabilities are imposed on any person other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs), which reduce the rate of customs duty for specified goods. This Act applies to any person or entity that applies for a TCO and subsequently benefits from the reduced duty rates for goods specified in the order. The geographic reach of this Act is nationwide, affecting all importers within Australia. The Act excludes certain goods from being subject to a TCO, as defined in section 269SJ, which includes goods that are already produced in Australia in the ordinary course of business and those that have substitutable alternatives. The Act also allows for the extension or restriction of its application through subordinate instruments, such as regulations, which may further define the eligibility criteria and operational details of TCOs.
Key Provisions
The Customs Act 1901, particularly Part XVA, governs the process for Tariff Concession Orders (TCOs) and establishes the conditions under which a lower rate of customs duty applies to specific goods. Section 269F allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO. If the application pertains to goods not specified in section 269SJ, the CEO must assess whether the application meets the core criteria outlined in section 269C. To meet these criteria, the application must demonstrate that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Definitions for terms like "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269P respectively.
The CEO is obligated to make a written TCO if satisfied that the application meets the core criteria. This obligation is specified under section 269P(3), which mandates that the CEO must declare that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. For TCO No. 0509091, this means the CEO declared that certain Wire Braided Hoses are subject to item 50 of Schedule 4, resulting in a 0% duty rate instead of the general 5% rate. The CEO must also publish a notice in the Gazette inviting submissions from interested parties, although no submissions were received in response to the notice for this particular TCO.
Failure to comply with the obligations set out in the Customs Act 1901 can lead to significant consequences. While the Act does not explicitly outline offences or penalties for breaches in relation to TCOs, breaches of other sections of the Customs Act may lead to both civil and criminal penalties. Civil penalties can include substantial fines, while criminal penalties can result in imprisonment. The exact penalties depend on the specific breach and the discretion of the court. Additionally, any individual or entity found to be in breach of the Act's provisions may face further administrative actions, such as the revocation of any tariff concessions granted.