EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514338
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.
Totalrubber Pty Ltd applied for a TCO in respect of certain Hose Clamps on 14 October 2005.
Instrument
TCO No 0514338 was made on 9 January 2006. It declares that those certain Hose Clamps 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 0%.
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. 0514338 is taken to have come into force on 14 October 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 the framework for the administration of customs and excise duties in Australia. Part XVA of the Act introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This scheme was introduced to address the problem of ensuring that Australian industries remain competitive by providing tariff relief on certain goods, provided that no substitutable goods are produced in Australia. The objective is to promote fair trade practices and protect domestic industries where applicable. Totalrubber Pty Ltd applied for a TCO concerning certain Hose Clamps, and following a review, TCO No. 0514338 was issued on 9 January 2006, reducing the duty on these goods from 5% to 0%. The CEO published a notice in the Gazette inviting objections, none of which were received. The TCO came into force on 14 October 2005, and while it does not affect the rights of any person as at the date of registration, it allows importers to apply for a refund of duty on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0514338 under the Customs Act 1901 applies to the concession of customs duties on specified goods, in this instance, certain Hose Clamps. This concession is available to entities or individuals who import these goods into Australia, provided they meet the core criteria as outlined in section 269C of the Act. Specifically, the concession applies if no substitutable goods are produced in Australia on the day the application was lodged. The Act mandates that the Chief Executive Officer of Customs (CEO) must make a written order, known as a Tariff Concession Order (TCO), if the application meets the criteria. This instrument, TCO No. 0514338, was made on 9 January 2006, declaring that the specified Hose Clamps are subject to a 0% duty rate, instead of the general rate of 5%. The TCO does not impose any liabilities on any person and it does not affect the rights of a person as at the date of registration, ensuring that no one is disadvantaged or incurs liabilities for actions taken prior to the registration date.
Key Provisions
The Customs Act 1901 sets out a scheme for Tariff Concession Orders (TCOs) under Part XVA. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO is satisfied that the application does not pertain to goods specified in section 269SJ, they must decide if the application meets the core criteria (section 269C). The application meets these criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269B and 269E). In the case of Hose Clamps, the CEO was satisfied that no substitutable goods were produced in Australia, and thus issued TCO No. 0514338, which specifies that these goods are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, resulting in a zero per cent duty rate instead of the general rate of five per cent.
The Act imposes obligations on both the applicant and the CEO. For the applicant, the key obligation is to ensure that their application is valid and that it pertains to goods not listed in section 269SJ. The CEO’s obligations include accepting valid applications, determining if they meet the core criteria, and making a written order if they do. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). In this instance, no submissions were received in response to the notice.
The Act does not explicitly outline specific offences or penalties for breaching the provisions related to TCOs. However, breaches of the Customs Act 1901 generally can lead to civil or criminal penalties, depending on the nature and severity of the breach. Civil penalties can include fines and the recovery of unpaid duties, while criminal penalties can include fines and imprisonment. The maximum penalties would be determined based on the specific breach and the relevant sections of the Customs Act 1901 or other related legislation. The commencement of the TCO, effective from the date the application was lodged, ensures that it does not disadvantage any person or impose liabilities for actions taken prior to its registration.