EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513346
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.
Wilson Mining Services Pty Limited applied for a TCO in respect of certain hollow injection bolts on 30 September 2005.
Instrument
TCO No 0513346 was made on 23 December 2005. It declares that those certain hollow injection bolts 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. 0513346 is taken to have come into force on 30 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 duties and the management of trade. The Act established a scheme under which Tariff Concession Orders (TCOs) can be made to reduce the rate of customs duty on certain goods. This scheme aims to promote fair trade practices and support Australian industries by making imported goods more competitive. Enacted by the Australian Parliament, the Customs Act 1901 was introduced to address the need for a structured approach to managing customs duties, ensuring that trade is conducted efficiently and fairly. The policy objective of the Act is to facilitate international trade while also protecting domestic industries and generating revenue through customs duties.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any individual or entity that seeks to apply for a TCO in relation to goods not specified in section 269SJ, which lists goods ineligible for such concessions. The Act is applicable nationally, as it is a Commonwealth legislation. The scope of the Act extends to ensuring that the application for a TCO meets the core criteria outlined in section 269C, which requires that no substitutable goods are produced in Australia at the time of the application. Once the CEO determines that the application meets the core criteria, they are mandated to issue a TCO, reducing the customs duty on the specified goods. This mechanism allows for tariff relief where it is deemed that there are no Australian-produced substitutes, thereby potentially benefiting importers by allowing them to apply for a refund of any duties paid before the TCO's effective date. The Act does not extend to imposing any new liabilities on individuals or entities, nor does it disadvantage anyone for actions taken prior to the TCO's effective date. The TCO No. 0513346, for instance, applied to certain hollow injection bolts, setting their customs duty rate at free, effective from the date of the application on 30 September 2005.
Key Provisions
The Customs Act 1901, specifically under Part XVA, provides a framework for Tariff Concession Orders (TCOs) which reduce the customs duty on certain goods (s 269F). When a person applies for a TCO, the Chief Executive Officer of Customs (CEO) is required to determine if the application meets the core criteria set out in section 269C. A TCO will be issued if the CEO is satisfied that no substitutable goods were produced in Australia on the day the application was lodged (s 269C). The application must not concern goods specified in section 269SJ, which are ineligible for TCOs. If the application satisfies these conditions, the CEO must issue a written TCO, specifying the reduced duty rate applicable to the goods (s 269P(3)).
The CEO is obligated to ensure that the application meets the specified criteria and, if it does, to proceed with making the TCO. Furthermore, the CEO is required to publish a notice in the Gazette once an application is accepted as valid, inviting any interested parties to submit objections if they believe the TCO should not be made (s 269K(1)). The CEO must also consider any submissions received and decide on the application accordingly. The CEO must ensure that the terms of the TCO are clearly stated, and the reduced duty rate is specified.
Breach of the conditions set out in the Customs Act 1901 can lead to civil and criminal consequences. For example, if a person knowingly imports goods that do not qualify for a TCO, or if a person falsely claims that a TCO applies to their goods, they could be subject to penalties. The maximum penalties for such offences can include fines and imprisonment, depending on the severity and intent of the breach. These provisions underscore the importance of compliance with the Act and the potential legal ramifications for non-compliance.
The Tariff Concession Order No. 0513346, which was made on 23 December 2005, declares that certain hollow injection bolts are subject to a reduced duty rate of free, down from the general rate of 5%. This order came into effect on 30 September 2005, the date the application was lodged (s 269S(1)). Importantly, this TCO does not affect the rights of any person other than the Commonwealth or impose any liabilities on any person for actions taken before the order was registered. Importers of the affected goods can benefit from this order by applying for a refund of duty paid on goods imported since the order's effective date.