EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514517
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.
BBZ Australia Pty Ltd applied for a TCO in respect of certain pvc injection hoses on 23 December 2005.
Instrument
TCO No 0514517 was made on 10 March 2006. It declares that those certain pvc injection hoses 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 10%. 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. 0514517 is taken to have come into force on 23 December 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. 0514517, enacted in 2006, is an instrument under the Customs Act 1901 designed to address the need for concessional tariff rates for specific imported goods. This instrument was introduced to provide a pathway for businesses to apply for reduced customs duty rates on certain goods, provided that there are no substitutable goods produced in Australia. The Customs Act 1901, enacted by the Australian Parliament, established a framework under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs). The policy objective of this legislative instrument is to facilitate trade by reducing the cost of imported goods for businesses, thereby promoting economic efficiency and competitiveness. The Tariff Concession Instrument No. 0514517 specifically applies to certain PVC injection hoses, reducing their customs duty from 10% to 0%, and came into effect on the date the application was lodged, 23 December 2005.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. These orders apply to specific goods that are subject to a reduced rate of customs duty. An application for a TCO can be made by any person provided the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from being eligible for tariff concessions. The CEO must determine if the application meets core criteria, specifically if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO is obligated to issue a TCO, effectively lowering the duty rate for the specified goods. For instance, in the case of TCO No. 0514517, PVC injection hoses were granted a 0% duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, down from the general rate of 10%. The CEO is also required to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO, although in this case, no objections were received. The TCO does not retroactively affect any rights or impose liabilities on anyone other than the Commonwealth and will only apply to imports made after the date the TCO is taken to have come into force.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0514517, made under the Customs Act 1901, pertain to the establishment of a tariff concession order (TCO) for certain PVC injection hoses. Section 269C of the Act outlines the core criteria that must be met for a TCO to be considered. These criteria require that on the day the application for the TCO is lodged, no substitutable goods must be produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, a written TCO must be issued. Section 269S(1) specifies that the TCO comes into force on the date the application was lodged.
The Act imposes several obligations on the parties involved. Firstly, the CEO must ensure that the application does not pertain to goods specified in section 269SJ, which are ineligible for TCOs. The CEO must also verify that no substitutable goods are produced in Australia in the ordinary course of business, as per section 269C. Once the CEO is satisfied that the application meets the core criteria, they must issue a written TCO, as stipulated in section 269P(3). Furthermore, section 269K(1) requires the CEO to publish a notice in the Gazette, inviting any interested parties to lodge submissions opposing the TCO. In this case, the CEO did not receive any submissions.
The Act outlines several potential consequences for non-compliance with its provisions. Although the Explanatory Statement does not specify any civil or criminal penalties for failing to comply with the requirements of the TCO, the general provisions of the Customs Act 1901 and associated regulations could impose penalties. For instance, unauthorised importation of goods or incorrect declaration of goods could result in fines or imprisonment, depending on the severity of the breach. Additionally, failure to comply with the TCO requirements might lead to financial penalties or legal action for non-refund of duties, as outlined in the Customs Act and its regulations.
In summary, Tariff Concession Instrument No. 0514517 establishes a tariff concession for certain PVC injection hoses under the Customs Act 1901. The CEO must ensure that the application meets the core criteria, publish a notice in the Gazette, and issue a written TCO if the criteria are met. Although the specific penalties for non-compliance with the TCO are not detailed in the Explanatory Statement, general provisions of the Customs Act 1901 and its regulations could impose significant penalties for breaches related to customs duties and import declarations.