EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510516
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.
Howard Australia Pty Ltd applied for a TCO in respect of certain Hay Rakes on 9 August 2005.
Instrument
TCO No 0510516 was made on 21 October 2005. It declares that those certain Hay Rakes 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. 0510516 is taken to have come into force on 9 August 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, establishes a framework for the regulation of customs duties, including the provision for Tariff Concession Orders (TCOs). The Act was introduced to address the need for streamlined customs duty processes and to provide tariff concessions for certain imported goods under specific conditions. In particular, it aims to ensure that imported goods, which do not have substitutable products produced domestically, are subject to reduced customs duties if no objections are raised against the concession. The Tariff Concession Instrument No. 0510516, made on 21 October 2005, exemplifies the application of this scheme. It was enacted in response to an application by Howard Australia Pty Ltd for tariff concessions on certain Hay Rakes, where the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thereby reducing the duty rate from 5% to 0%. This instrument highlights the Act's objective to facilitate smoother trade practices by reducing unnecessary tariffs on imported goods, provided they meet the stipulated criteria.
Scope and Application
The Tariff Concession Instrument No. 0510516, made under Part XVA of the Customs Act 1901, applies to any person or entity seeking a tariff concession order (TCO) for specific goods, in this case Hay Rakes, which are eligible for a reduced rate of customs duty. The Act mandates that such an application be submitted to the Chief Executive Officer of Customs, who must determine whether the application meets the core criteria, specifically that no substitutable goods are produced in Australia at the time of application. If the application is deemed to meet these criteria, the CEO is obligated to issue a TCO, which provides for a zero percent duty rate on the specified goods, as opposed to the general rate of 5 percent. The instrument extends to the Commonwealth jurisdiction and has a national reach, applying uniformly across Australia. There are no stated exclusions or exemptions within the text, though the application process ensures that goods not fitting the specified criteria will not receive tariff concessions. Additionally, the instrument may be supplemented by subordinate instruments, which could provide further clarification or detail regarding the application and enforcement of tariff concessions.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0510516 under the Customs Act 1901 are sections 269F, 269C, and 269P(3). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C establishes that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, they must make a written order (a TCO) applying a prescribed rate of duty. Specifically, in this case, the TCO (No. 0510516) declares that certain Hay Rakes are subject to a 0% duty rate instead of the general 5% duty rate.
The obligations imposed by the Act on the parties or entities it governs include the requirement for a person to apply to the CEO for a TCO if they wish to benefit from a lower customs duty rate. The CEO must then assess whether the application meets the core criteria, which involves determining if there are any substitutable goods produced in Australia. If the CEO decides that the application meets the core criteria, they must issue a written TCO. The CEO also has a responsibility to publish a notice in the Gazette inviting any person who might oppose the TCO to lodge a submission. In this case, the CEO published such a notice and received no submissions.
Regarding the consequences for non-compliance, the Act does not explicitly outline offences or penalties for failing to comply with the TCO provisions. However, any breach of the Customs Act 1901 could potentially lead to civil or criminal penalties, depending on the nature and severity of the breach. The penalties for breaches of the Customs Act can include fines and, in serious cases, imprisonment. The maximum penalties are not specified in this particular instrument but would be determined according to the broader provisions of the Customs Act and any relevant regulations.
The TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, ensuring that no person is disadvantaged or incurs liabilities for actions taken before the TCO came into effect. Importers, however, will benefit from the rights conferred under the TCO, such as the ability to apply for a refund of duty on goods imported since the day the TCO came into force. This benefit is explicitly stated under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any new liabilities on any person.