EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511820
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.
The Trustee for Beaver Industries Unit Trust applied for a TCO in respect of certain mooring buoys on 08 September 2005.
Instrument
TCO No 0511820 was made on 25 November 2005. It declares that those certain mooring buoys 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. 0511820 is taken to have come into force on 08 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 Tariff Concession Instrument No. 0511820, enacted under the Customs Act 1901, was introduced to provide a concessional rate of customs duty for certain goods, specifically addressing the issue of tariff concessions for imported goods not produced in Australia. This instrument was developed to facilitate the application process for Tariff Concession Orders (TCOs) as outlined in Part XVA of the Customs Act 1901. The primary objective of this legislation, as enacted by the Chief Executive Officer of Customs, is to ensure that applications for tariff concessions are assessed against specific criteria, including the absence of substitutable goods produced in Australia. The policy objective is to provide economic benefits by reducing the customs duty on certain imported goods, thus supporting industries that do not have domestic production alternatives. The Tariff Concession Instrument No. 0511820 was made on 25 November 2005, following an application by the Trustee for Beaver Industries Unit Trust for certain mooring buoys, effective from 08 September 2005.
Scope and Application
The Tariff Concession Instrument No. 0511820 under the Customs Act 1901 applies specifically to certain mooring buoys, as declared in the instrument, and the concession is granted to the Trustee for Beaver Industries Unit Trust. The instrument aims to lower the customs duty rate for these specific goods from the general rate to a concessional rate, in this case, free of duty, provided the application meets the core criteria outlined in the Act. The application process involves submitting a request to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO), which is subject to the CEO's determination that no substitutable goods are produced in Australia in the ordinary course of business. The instrument is effective from the date the application was lodged, 8 September 2005, and it does not disadvantage or impose liabilities on any person other than the Commonwealth, thereby benefiting the rights of importers who may apply for a refund of duty on goods imported since the effective date. This concession does not extend to goods specified in section 269SJ of the Customs Act, which are ineligible for such tariff concessions.
Key Provisions
The Tariff Concession Order (TCO) No. 0511820, made under section 269F of the Customs Act 1901, pertains specifically to certain mooring buoys (section 269C). If the Chief Executive Officer (CEO) of Customs is satisfied that no substitutable goods are produced in Australia in the ordinary course of business, the CEO must issue a TCO. This order applies a free rate of duty on the specified goods, which otherwise attract a general duty rate of 5% (subsection 269P(3)). The order was made on 25 November 2005, following an application from the Trustee for Beaver Industries Unit Trust on 08 September 2005. The TCO was published in the Gazette with an invitation for objections, none of which were received. The TCO took effect from the date the application was lodged, 08 September 2005.
The Act imposes several obligations on the CEO in handling TCO applications. Upon accepting an application as valid, the CEO must publish a notice in the Gazette inviting any interested party to submit objections (subsection 269K(1)). The CEO is also required to assess whether the application meets the core criteria set out in section 269C. This involves verifying that no substitutable goods are produced in Australia and that the goods are not specified in section 269SJ, which lists goods ineligible for TCOs. If the CEO determines that the application meets the criteria, they must make a written order specifying the applicable item from Schedule 4 of the Customs Tariff Act 1995 (subsection 269P(3)).
Failure to comply with the provisions of the Customs Act 1901 concerning TCOs can result in various consequences. While the explanatory statement does not specify detailed offences or penalties, breaches of customs regulations generally attract penalties under the Customs Act and associated regulations. For instance, knowingly making a false statement or providing false information in an application can lead to fines and, in severe cases, imprisonment. The maximum penalties would depend on the specific nature of the breach, but they can include substantial fines and/or imprisonment for up to two years under section 236 of the Customs Act. Additionally, failure to comply with TCO requirements may also result in the invalidation of the concession and potential retrospective financial liabilities for the applicant.