EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509673
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.
John Wagstaff Constructions Pty Ltd applied for a TCO in respect of certain Desanders on 20 July 2005.
Instrument
TCO No 0509673 was made on 30 September 2005. It declares that those certain Desanders 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. 0509673 is taken to have come into force on 20 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. 0509673, enacted in 2005, was introduced to address the need for tariff concessions under the Customs Act 1901, particularly in cases where goods are not being produced in Australia in the ordinary course of business. This instrument is a response to applications made under section 269F of the Act, which allows for the application of a lower rate of customs duty on certain goods. The Tariff Concession Orders (TCOs) are made by the Chief Executive Officer of Customs (CEO) if the application meets the core criteria, including the absence of substitutable goods produced in Australia as outlined in sections 269C and 269D of the Act. The policy objective is to facilitate the import of goods that are not locally produced, thereby supporting trade and economic activities. The instrument does not affect existing rights or impose new liabilities on individuals or entities, ensuring a smooth transition for those already importing the specified goods.
Scope and Application
The Tariff Concession Instrument No. 0509673 under the Customs Act 1901 applies to goods, specifically certain Desanders, for which John Wagstaff Constructions Pty Ltd applied on 20 July 2005. The application process involves the Chief Executive Officer of Customs (CEO) determining whether the goods meet the core criteria set out in the Act. The Act mandates that a Tariff Concession Order (TCO) may be issued if the goods are not substitutable by any goods produced in Australia in the ordinary course of business, thereby ensuring that local production is not adversely affected. Upon satisfaction of these criteria, the CEO issues a TCO that specifies a lower rate of customs duty, in this case reducing the duty from 5% to 0%. This order, effective from the date of the application, benefits importers by allowing them to apply for a refund of duty on goods imported since that date. The legislation does not disadvantage any person other than the Commonwealth and imposes no liabilities on individuals or entities.
The scope of the Customs Act 1901, as applied through this Tariff Concession Instrument, extends nationally across Australia, aligning with the federal jurisdiction of customs duties. The application and effect of the TCO are limited to the specific goods identified in the instrument, and it does not extend to goods that are specified in section 269SJ of the Act, which cannot be subject to a TCO. Any further application or extension of the Act's provisions is managed through subordinate instruments, which may provide additional details or conditions for specific cases.
Key Provisions
The Tariff Concession Instrument No. 0509673, issued under the Customs Act 1901, is an instrument that provides a concession on customs duty for certain goods, specifically Desanders in this instance (s 269P(3)). The instrument declares that these Desanders are subject to a zero per cent customs duty rate, as opposed to the general 5 per cent rate, provided that the Chief Executive Officer (CEO) of Customs is satisfied that no substitutable goods were produced in Australia (s 269C). This decision is made when the CEO determines that the application for a Tariff Concession Order (TCO) meets the core criteria, such as the absence of substitutable goods being produced domestically (s 269C, s 269B). The TCO came into effect on the date the application was lodged, which was 20 July 2005 (s 269S(1)).
The Act imposes certain obligations on the CEO and other parties involved in the process of applying for and granting a TCO. Once a TCO application is deemed valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on why the TCO should not be made (s 269K(1)). The CEO, in turn, has the responsibility to assess the application against the core criteria and decide whether to grant the TCO (s 269C). Furthermore, the CEO must ensure that the application does not pertain to goods specified in section 269SJ, which are ineligible for TCOs (s 269F). In the case of TCO No. 0509673, the CEO did not receive any submissions opposing the order, leading to its approval.
Breaching the provisions of the Customs Act 1901 may result in various penalties and consequences, both civil and criminal. While the explanatory statement does not specify the exact penalties for breaches related to TCOs, it is worth noting that the Act contains general provisions for offences and penalties concerning customs and border control. These penalties can include fines, imprisonment, or both, depending on the severity of the breach. For instance, knowingly making a false statement or providing misleading information in a TCO application could lead to criminal charges under the Act (s 236). Additionally, failing to comply with the Act's provisions could result in civil penalties, such as fines or the seizure of goods. It is essential for parties involved in the TCO process to adhere to the Act's requirements to avoid any potential legal repercussions.