EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509683
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.
New Accord Pty Ltd As Trustee For The AMI Unit Trust applied for a TCO in respect of certain marine thruster parts on 18 July 2005.
Instrument
TCO No 0509683 was made on 23 September 2005. It declares that those certain marine thruster parts 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. 0509683 is taken to have come into force on 18 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 Parliament of Australia to regulate customs and excise duties and to facilitate international trade. This legislation introduced a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). The problem it aimed to address was the need to provide relief from customs duties on certain goods that could not be produced domestically or where there were no suitable substitutes, thereby promoting economic efficiency and supporting industries reliant on imported components. The policy objective was to reduce the cost burden on businesses and consumers by applying lower rates of customs duty to specified goods. Tariff Concession Instrument No. 0509683 was made under this scheme, providing a concession on marine thruster parts, effectively reducing their duty rate from 5% to free. The instrument came into effect on the date of application, 18 July 2005, and no submissions were received against its implementation.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the scheme for Tariff Concession Orders (TCOs), which apply to goods that are subject to a lower rate of customs duty. A person may apply to the Chief Executive Officer (CEO) of Customs for a TCO if the goods are not specified in section 269SJ of the Act, which lists those that cannot be subject to a TCO. If the CEO determines that the application meets the core criteria, a TCO is issued, lowering the duty on the specified goods. The CEO must ensure that no substitutable goods are produced in Australia, as outlined in sections 269C and 269D of the Act. The TCO applies to the particular marine thruster parts for which New Accord Pty Ltd applied, reducing the general duty rate of 5% to free duty, effective from the date the application was lodged. The CEO is also required to publish a notice in the Gazette inviting submissions on the TCO application, although no submissions were received for this particular TCO. The TCO does not affect any pre-existing rights or liabilities of persons other than the Commonwealth.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0509683 under the Customs Act 1901 (section 269C) involve the creation of a Tariff Concession Order (TCO) for certain marine thruster parts. If the Chief Executive Officer of Customs (CEO) is satisfied that no substitutable goods were produced in Australia in the ordinary course of business, a TCO may be issued. This instrument (section 269P(3)) declares that the specified marine thruster parts are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, reducing the duty rate from 5% to free.
The obligations imposed by the Act on the parties or entities it governs are multifaceted. Firstly, the CEO is mandated to review the TCO application to ensure it meets the core criteria set forth in section 269C. This includes verifying that no substitutable goods were produced in Australia. Once the CEO is satisfied with the application, they must publish a notice in the Gazette inviting any objections to the proposed TCO. Additionally, the CEO must ensure that the TCO does not adversely affect the rights of any person as at the date of registration or impose any liabilities for actions taken prior to the registration.
In terms of compliance, failure to adhere to the requirements set forth in the Customs Act 1901 may result in civil and criminal consequences. For instance, if a party knowingly provides false information in a TCO application, they may face penalties under section 288 of the Act, which can include fines up to 10,000 penalty units or imprisonment for up to five years, or both. Similarly, non-compliance with the provisions regarding the publication of notices in the Gazette and the processing of objections could lead to administrative penalties.
The Act also outlines specific offences and penalties for breaches. For example, section 289 of the Act imposes penalties for fraudulent or negligent statements made in an application, with penalties that can include fines and imprisonment. Additionally, section 290 provides for the recovery of duties and charges, with the possibility of financial penalties for non-compliance. The Act ensures that the obligations and requirements are strictly enforced, thereby maintaining the integrity of the tariff concession scheme.