EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511804
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.
Alcan Gove Development Pty Ltd applied for a TCO in respect of certain scale load receptors on 05 September 2005.
Instrument
TCO No 0511804 was made on 25 November 2005. It declares that those certain scale load receptors 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. 0511804 is taken to have come into force on 05 September 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, was designed to manage the import and export of goods into and out of the country, including the imposition of customs duties. The Act introduced a scheme under which Tariff Concession Orders (TCOs) could be made by the Chief Executive Officer of Customs to provide a lower rate of customs duty on certain goods. The problem or gap that the Act sought to address was the need for a flexible mechanism to provide tariff relief on goods that could not be produced domestically in an ordinary course of business, thereby encouraging imports and fostering economic efficiency. Instrument TCO No. 0511804, enacted in 2005, was created to provide such relief on specific scale load receptors, in response to an application by Alcan Gove Development Pty Ltd. The policy objective was to ensure that no substitutable goods were produced in Australia, thus making the concession applicable. The instrument took effect on the date the application was lodged, and it did not disadvantage any person or impose any liabilities on individuals other than the Commonwealth.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at providing lower rates of customs duty on specified goods. These concessions apply to any individual or entity that imports goods falling under the TCO, thereby providing tariff relief on these specific items. The geographical scope of the Act is national, with the TCO extending across all states and territories of Australia. It is crucial to note that TCOs do not apply to goods listed in section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO. The process requires an application to the CEO, who must determine if the application meets the core criteria, particularly if no substitutable goods are produced in Australia at the time of application. The application of this Act can be further refined through subordinate instruments, allowing for detailed specifications on eligibility and procedural requirements.
Key Provisions
The Customs Act 1901, under Part XVA, provides a framework for Tariff Concession Orders (TCOs) which reduce customs duty on specified goods (s 269F). If an applicant, such as Alcan Gove Development Pty Ltd, applies for a TCO, the Chief Executive Officer of Customs (CEO) must determine if the application meets the core criteria (s 269C). If the CEO is satisfied that no substitutable goods were produced in Australia in the ordinary course of business at the time of the application, a TCO can be issued (s 269P(3)). In this case, TCO No. 0511804, made on 25 November 2005, applies to certain scale load receptors, reducing the duty rate from 5% to free (Schedule 4, item 50, Customs Tariff Act 1995).
The Act imposes specific obligations on the CEO, including the necessity to publish a notice in the Gazette inviting submissions from interested parties if they believe the TCO should not be made (s 269K(1)). In the case of TCO No. 0511804, no submissions were received. The Act also mandates that a TCO is considered to come into force on the date the application was lodged (s 269S(1)), which for TCO No. 0511804 was 5 September 2005. Additionally, the TCO does not affect any pre-existing rights or impose liabilities on any person except the Commonwealth (s 269S(2)). Importers of the affected goods can apply for a duty refund under Regulation 126(1)(r) from the date the TCO took effect.
Failure to comply with the requirements of the Customs Act 1901 and associated regulations can lead to civil and criminal penalties. For instance, knowingly making a false or misleading statement in an application for a TCO can result in a civil penalty of up to 10,000 penalty units or imprisonment for five years, or both, under section 274 of the Customs Act. Furthermore, any person who contravenes the provisions of a TCO, such as by failing to comply with the conditions specified in the order, may face civil penalties under section 283A of the Act, which can include fines of up to 10,000 penalty units. These stringent measures ensure adherence to the legislative framework governing tariff concessions.