EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509136
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.
Boral Masonry Ltd applied for a TCO in respect of a certain concrete paver production line on 19 July 2005.
Instrument
TCO No 0509136 was made on 23 September 2005. It declares that those certain concrete paver production lines 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. 0509136 is taken to have come into force on 19 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 Australian Parliament, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The primary objective of this Act is to provide a mechanism for reducing customs duty on certain goods that are not produced domestically, thereby encouraging trade and investment. Specifically, section 269F of the Act allows for applications to the CEO for a TCO on goods that meet certain criteria, such as the absence of substitutable goods produced in Australia as per section 269C. The explanatory statement for Tariff Concession Instrument No. 0509136, issued on 23 September 2005, details an application by Boral Masonry Ltd for a TCO on a concrete paver production line. Following the CEO's determination that no substitutable goods were produced in Australia, the TCO was issued, resulting in a reduction of the duty rate from the general 5% to free, effective from the date of the application on 19 July 2005. This concession aims to support the import of specific goods without imposing any additional liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0509136, made under Part XVA of the Customs Act 1901, applies to the specific goods, in this instance, a certain concrete paver production line, that are the subject of a Tariff Concession Order (TCO). The Act allows the Chief Executive Officer of Customs to make a TCO if certain criteria are met, such as the absence of substitutable goods produced in Australia in the ordinary course of business. The application process involves the CEO reviewing the application to ensure it does not pertain to goods excluded under section 269SJ of the Act. If the criteria are met, the CEO must make a TCO, which was the case for Boral Masonry Ltd’s application lodged on 19 July 2005. The TCO, which came into force on the same date, declares that the specified concrete paver production lines are subject to a zero rate of customs duty as opposed to the general rate of 5%. The TCO does not retroactively affect the rights of any person other than the Commonwealth and does not impose any liabilities. Importers of these goods can apply for a refund of duty on goods imported since the TCO came into force.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0509136 are sections 269F, 269C, 269B, and 269P. Section 269F (1) 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 is not in respect of goods specified in section 269SJ, they must determine whether the application meets the core criteria set out in section 269C. If the application meets these criteria, the CEO must make a written order (a TCO) under section 269P(3), declaring that the goods are subject to a prescribed rate of duty in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties or entities it governs include the requirement for applicants to ensure that their applications are not in respect of goods specified in section 269SJ. The CEO is obligated to assess whether an application meets the core criteria under section 269C and to make a written TCO if the criteria are met. The CEO must also publish a notice in the Gazette inviting any submissions on the TCO application under subsection 269K(1), although no submissions were received for this particular TCO. The Act further ensures that the TCO does not affect the rights of any person adversely as at the date of registration, nor impose liabilities on any person in respect of actions taken prior to the date of registration.
In terms of offences, penalties, or civil and criminal consequences, the Act does not specify any offences directly related to the issuance or compliance with TCOs. However, the general legal framework of the Customs Act 1901 and associated regulations might provide for penalties for breaches of customs laws, which could include fines and imprisonment. For instance, section 238 of the Customs Act 1901 provides for penalties for breaches of the Act, which may include fines of up to 10,000 penalty units and/or imprisonment for up to 10 years, depending on the severity of the breach. The Tariff Concession Instrument itself does not impose additional penalties beyond what is already outlined in the broader customs legislation.
Overall, the Tariff Concession Instrument No. 0509136 provides a clear process for the application and approval of TCOs, ensuring that eligible goods benefit from reduced customs duties. The Act's provisions ensure that the rights of all parties are protected, and compliance with the TCO is monitored within the broader framework of the Customs Act 1901.