EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512078
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.
Wilkore Pty Ltd applied for a TCO in respect of certain prefabricated cleanrooms on 09 September 2005.
Instrument
TCO No 0512078 was made on 18 November 2005. It declares that those certain prefabricated cleanrooms 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. 0512078 is taken to have come into force on 09 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 Australian Parliament, provides a framework for the administration of customs and excise in Australia. One significant aspect of this Act is the ability for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) under Part XVA, which allow for lower rates of customs duty on certain goods. This mechanism was introduced to address the issue of providing tariff relief to importers of goods that are not produced in Australia and for which there are no suitable substitutes. The policy objective behind this is to facilitate the importation of goods that would otherwise be too expensive due to high tariff barriers, thus supporting trade and economic activity. The Explanatory Statement for Tariff Concession Instrument No. 0512078, for example, outlines the process by which Wilkore Pty Ltd successfully applied for a TCO on certain prefabricated cleanrooms, resulting in a reduction of the customs duty from 5% to free. This process ensures that the rights of importers are protected and that no liabilities are imposed on individuals as a result of the concession.
Scope and Application
The Tariff Concession Order No. 0512078 under the Customs Act 1901 applies specifically to certain prefabricated cleanrooms, allowing for a concession on the customs duty that would typically apply to these goods. The Act applies to Wilkore Pty Ltd, the applicant of the concession, as well as any other entities or individuals involved in the importation of these specified goods. The geographic scope of this legislation is national, as it is governed by Commonwealth law and applies across Australia. The order excludes any goods that are specified in section 269SJ of the Act, which outlines those that cannot be subject to a Tariff Concession Order. Additionally, the CEO of Customs is required to consult with the public, inviting submissions if there are reasons why the concession should not be granted, though no submissions were received for this particular order. The order came into effect on 9 September 2005, the date the application was lodged, and it does not retroactively affect any rights or impose any liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The Customs Act 1901 (the Act) enables the Chief Executive Officer of Customs (the CEO) to make Tariff Concession Orders (TCOs) which apply lower rates of customs duty to certain goods (s 269F). The application process for a TCO begins with a person lodging an application with the CEO (s 269F). If the CEO determines that the application does not pertain to goods specified in section 269SJ, they must assess whether it meets the core criteria set out in section 269C. Specifically, the application will meet the core criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). Definitions for key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269D of the Act, respectively.
To meet the core criteria, the CEO must ensure that the application pertains to goods that have no substitutable goods produced in Australia (s 269C). If the CEO is satisfied that the application meets these criteria, they must make a written TCO declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff), thereby applying a specified rate of duty (s 269P(3)). For example, Instrument TCO No 0512078 applies to certain prefabricated cleanrooms, reducing the duty rate from the general rate of 5% to free (s 269P(3)).
The Act imposes obligations on the CEO to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (s 269K(1)). In this case, the CEO did not receive any submissions in response to the notice (s 269K(1)). Additionally, the Act requires that a TCO be taken to have come into force on the date the application was lodged (s 269S(1)). Therefore, TCO No 0512078 is deemed to have come into force on 09 September 2005 (s 269S(1)). Importantly, the TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person other than the Commonwealth in respect of actions taken before the registration date (s 269S(1)).
Under the Customs Act 1901, breaches or non-compliance with the provisions regarding TCOs may result in civil or criminal penalties. While the specific penalties for breaches of TCOs are not detailed in the provided text, general provisions in the Act and related regulations may apply. For example, section 236 of the Act provides for penalties for false statements or representations made in the course of customs administration, which could potentially include applications for TCOs. The maximum penalties for such offences can include substantial fines and, in some cases, imprisonment, depending on the severity and intent of the breach. It is important for all parties involved in the TCO process to adhere to the statutory requirements to avoid potential legal consequences.