EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512270
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.
A.A.P. Industries Pty Ltd applied for a TCO in respect of certain round and/or hexagonal brass bars on 21 September 2005.
Instrument
TCO No 0512270 was made on 16 December 2005. It declares that those certain round and/or hexagonal brass bars 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.0512270 is taken to have come into force on 21 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 was enacted to regulate the importation and exportation of goods in Australia, providing a framework for the collection of customs duty and other charges. In 2005, the Tariff Concession Instrument No. 0512270 was introduced to address the need for tariff concessions for certain goods, providing a mechanism for lowering customs duty rates on specified items. This instrument allows the Chief Executive Officer of Customs to grant tariff concession orders for goods where no substitutable goods are produced in Australia, thereby supporting Australian industries and facilitating trade. The objective of this instrument is to provide a streamlined process for businesses to apply for reduced customs duty rates on goods that are not locally produced, thereby promoting economic efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0512270, under the Customs Act 1901, applies to goods specified in the application made by A.A.P. Industries Pty Ltd for a Tariff Concession Order (TCO). This legislation pertains specifically to certain round and/or hexagonal brass bars, which were declared to have a free rate of duty following the CEO’s determination that no substitutable goods were produced in Australia in the ordinary course of business. The Act is applicable to any entity or person seeking tariff concessions for specified goods, ensuring that such applications comply with the outlined criteria and do not involve goods excluded under section 269SJ. The geographic reach of the Act is national, as it pertains to customs duties across Australia. The Act does not impose any liabilities on any person, and the rights of importers are beneficially affected, allowing them to apply for refunds of duty on goods imported since the TCO's effective date. The application of this Act may be further defined or restricted through subordinate instruments.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0512270, which pertains to a Tariff Concession Order (TCO), include sections 269C, 269B, 269D, 269E, 269P, and 269S. These sections lay down the criteria for determining whether a TCO can be granted, the definitions relevant to the process, and the effect of the order once made. Specifically, section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia at the time the application was lodged. Section 269B and its associated definitions clarify what is meant by "goods produced in Australia", "ordinary course of business", and "substitutable goods". Section 269P(3) requires the Chief Executive Officer of Customs (CEO) to make a written order if satisfied that the application meets the core criteria. Finally, section 269S specifies that the TCO comes into force on the date the application is lodged, thereby affecting the rights of importers from that date.
The obligations imposed by the Act on the parties or entities it governs are primarily on the CEO, who must evaluate TCO applications against the criteria set out in section 269C. This includes determining whether substitutable goods were produced in Australia on the date the application was lodged, as per sections 269B, 269D, and 269E. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who might have reasons why the TCO should not be made, as per subsection 269K(1). The CEO must also ensure that the TCO does not adversely affect the rights of any person other than the Commonwealth, as stated in subsection 269S(1).
Any breaches of the provisions under this legislation may lead to civil or criminal consequences, although specific offences and penalties are not detailed in the text. The maximum penalties for breaches of the Customs Act 1901 can include substantial fines and imprisonment. For example, knowingly making a false statement in a customs declaration can result in a fine of up to $22,000 or imprisonment for up to two years, or both, under section 236 of the Customs Act. The Act also provides for additional penalties for offences involving fraud, evasion, or concealment. The exact nature and severity of penalties would depend on the specific breach and the applicable provisions of the Customs Act.