EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509097
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.
Abet Pty Ltd applied for a TCO in respect of certain Laminates on 13 July 2005.
Instrument
TCO No 0509097 was made on 30 September 2005. It declares that those certain Laminates 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. 0509097 is taken to have come into force on 13 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 regulate the import and export of goods in Australia and to collect customs duty. One of the mechanisms it provides is the Tariff Concession Order (TCO), which allows for a reduced rate of customs duty on certain goods under specific conditions. The Tariff Concession Instrument No. 0509097, enacted in 2005, is a specific instance where the Chief Executive Officer of Customs (CEO) made a TCO for certain laminates, reducing their duty from 5% to 0%. This concession was granted after Abet Pty Ltd applied on 13 July 2005 and the CEO determined that no substitutable goods were being produced in Australia, thereby meeting the core criteria under section 269C of the Act. The CEO published a notice in the Gazette inviting submissions against the TCO, but none were received. Consequently, the TCO was registered on 30 September 2005 and is deemed to have come into force on 13 July 2005, benefiting importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This legislation applies to any person or entity seeking to import goods that may benefit from reduced customs duty rates. The scope of the Act extends to any industry involved in the importation of goods, focusing on transactions where a lower rate of duty can be applied based on the eligibility criteria set out in the Act. The application of this Act is national, impacting all importers across Australia. The Act excludes certain goods from being subject to a TCO as specified in section 269SJ. The application process for a TCO involves meeting the core criteria outlined in section 269C, which hinges on the absence of substitutable goods produced in Australia. Subordinate instruments, such as the Customs Tariff Act 1995, further define terms and rates applicable to specific goods under a TCO. The commencement of a TCO is effective from the date the application is lodged, ensuring that any benefits or obligations under the order are retroactively applicable to transactions from that date.
Key Provisions
The Tariff Concession Instrument No. 0509097, made under the Customs Act 1901, establishes a tariff concession order (TCO) for certain laminates, reducing the customs duty rate from 5% to 0%. The instrument is effective from 13 July 2005, the date the application was lodged (section 269S(1)). A TCO is granted when the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, specifically, that no substitutable goods were produced in Australia at the time of the application (section 269C). The CEO is mandated to publish a notice in the Gazette inviting submissions from interested parties, although in this case, no submissions were received (subsection 269K(1)).
The obligations under the Customs Act 1901 for the CEO include ensuring that any TCO application is not in respect of goods specified in section 269SJ, which cannot be subject to a TCO. If the application meets the core criteria, the CEO must make a written order specifying the goods and the applicable item from Schedule 4 of the Customs Tariff Act 1995 (subsection 269P(3)). Furthermore, the CEO must consider any submissions received in response to the Gazette notice, although this step was not necessary in this instance as no submissions were made.
Breaches of the Customs Act 1901 may result in both civil and criminal penalties. Under section 269H, any person who knowingly makes a false or misleading statement in an application for a TCO is subject to a penalty of up to 5,000 penalty units or imprisonment for up to two years, or both. Additionally, if the CEO determines that a TCO should not have been made due to a false or misleading statement, the person who made the statement may be liable for any additional duty, interest, and costs incurred by the Commonwealth. These penalties underscore the importance of accuracy and truthfulness in TCO applications.