EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510729
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.
Jord International Pty Ltd applied for a TCO in respect of certain Separator Parts on 16 August 2005.
Instrument
TCO No 0510729 was made on 28 October 2005. It declares that those certain Separator 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 10%. 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. 0510729 is taken to have come into force on 16 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 Tariff Concession Instrument No. 0510729 was enacted in 2005 as part of the Customs Act 1901, to facilitate the reduction of customs duties on certain goods not produced in Australia. This legislative instrument addresses a specific gap in the existing tariff regime by allowing the Chief Executive Officer of Customs to grant tariff concessions to importers, thereby reducing the financial burden on businesses that rely on importing non-domestically produced goods. The policy objective is to promote economic efficiency by ensuring that Australian businesses have access to competitively priced imported goods, thereby encouraging trade and supporting industry competitiveness. The instrument was developed following an application from Jord International Pty Ltd for tariff concessions on certain Separator Parts, which was granted after it was confirmed that no substitutable goods were produced in Australia. This measure is intended to benefit importers by allowing them to apply for a refund of duties paid on these goods since the date the concession was deemed to come into force.
Scope and Application
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) to provide reduced rates of customs duty on certain goods. Specifically, this Act applies to entities and individuals who seek tariff concessions for goods imported into Australia, provided that these goods are not specified in section 269SJ of the Act. This legislation is national in scope, applying across the Commonwealth of Australia. The application process involves an entity submitting an application to the CEO for a TCO, which the CEO then evaluates based on the core criteria outlined in the Act. If the CEO determines that the application meets the criteria, including the absence of substitutable goods produced in Australia in the ordinary course of business, a TCO is issued, thereby applying a lower rate of customs duty to the specified goods. This process ensures that Australian industries are not unduly disadvantaged by high import duties on goods that could be locally produced, thereby fostering a competitive market. The Act also allows for subordinate instruments to extend or refine the application of the TCO provisions.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0510729 under the Customs Act 1901, as amended, involve the creation and implementation of Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO determines that the application is valid and meets the criteria outlined in section 269C, a TCO is issued, effectively reducing the customs duty on the specified goods (section 269P(3)). For the specific case of TCO No. 0510729, the instrument declares that certain Separator Parts are subject to a 0% duty rate instead of the general 10% rate (item 50 of Schedule 4 to the Customs Tariff Act 1995).
Entities and individuals governed by this legislation are required to ensure that any goods for which a TCO is applied are not substitutable goods produced in Australia on the day the application was lodged. This is crucial under sections 269C and 269D, which define the terms 'substitutable goods' and 'goods produced in Australia'. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who may have objections to the TCO being issued (subsection 269K(1)). This ensures transparency and allows for public input before the TCO is finalised.
Failure to comply with the requirements set out in the Customs Act 1901 could lead to various civil or criminal consequences. While the specific penalties for breach are not detailed in the explanatory statement, it is known that breaches of customs regulations generally carry significant penalties, including fines and potential imprisonment. For instance, under section 246 of the Customs Act 1901, a person who knowingly or recklessly makes a false statement in an application for a TCO may be liable for a fine of up to $22,200 or imprisonment for up to two years, or both. The exact penalties would depend on the specific nature and severity of the breach.
The TCO No. 0510729, effective from 16 August 2005, provides a clear pathway for importers to benefit from reduced customs duties on certain Separator Parts, provided all statutory requirements are met. The CEO's role in verifying applications and the public notice requirement ensures that the process is both transparent and fair. Understanding these provisions and adhering to the stipulated requirements is crucial for entities and individuals involved in importing goods under the Customs Act 1901.