EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515069
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.
Diver Metal Products Pty Ltd applied for a TCO in respect of certain door assembly lines on 31 October 2005.
Instrument
TCO No 0515069 was made on 30 January 2006. It declares that those certain door assembly lines 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. 0515069 is taken to have come into force on 31 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 was enacted by the Parliament of Australia to regulate the importation and exportation of goods, including the imposition and collection of customs duties. One aspect of this regulation involves the application of tariff concession orders (TCOs), which allow for lower rates of customs duty on certain goods under specific conditions. Enacted to address the need for flexibility in tariff rates based on the production status of goods within Australia, TCOs provide a mechanism for the Chief Executive Officer of Customs to grant tariff concessions when no substitutable goods are produced in Australia. The objective of this legislative framework is to encourage the import of goods that are not domestically produced, thereby supporting trade and economic policy objectives. The Tariff Concession Instrument No. 0515069, made under the authority of the Customs Act 1901, exemplifies this process by granting a tariff concession to Diver Metal Products Pty Ltd for certain door assembly lines, reducing the duty rate from 5% to free, effective from the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0515069 under the Customs Act 1901 applies to the specific case of certain door assembly lines that were subject to an application by Diver Metal Products Pty Ltd. The Act enables the Chief Executive Officer of Customs to grant tariff concessions on goods, provided the application meets the core criteria stipulated in the Act, including the absence of substitutable goods produced in Australia. This instrument specifically addresses the application made by Diver Metal Products Pty Ltd on 31 October 2005, which was accepted as meeting the criteria, leading to the issuance of Tariff Concession Order No. 0515069 on 30 January 2006. The geographic reach of this legislation is national, as it pertains to the Commonwealth of Australia, and it affects entities involved in the importation of the specified door assembly lines. The order does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons for actions taken prior to the order's registration. Subordinate instruments may further extend or restrict the application of this legislation.
Key Provisions
The Customs Act 1901, specifically within Part XVA, outlines the procedures for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). This legislation allows for lower rates of customs duty to be applied to goods specified in a TCO. For a TCO to be considered, an application must be submitted to the CEO, who will assess if the application meets the core criteria (section 269C). These criteria are satisfied if no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged (section 269D and 269E). If the CEO is satisfied that the application meets the criteria, they are required to issue a written TCO order (section 269P(3)).
The obligations under this Act for the CEO include the mandatory publication of a notice in the Gazette when a TCO application is accepted as valid, inviting submissions from any interested parties (subsection 269K(1)). For the entities governed by this Act, they must ensure that their applications for a TCO are comprehensive and meet the specified criteria to avoid any potential delays or rejections. In this case, Diver Metal Products Pty Ltd successfully applied for a TCO for certain door assembly lines, which resulted in the issuance of TCO No. 0515069 (subsection 269S(1)). This order specifies that the goods in question are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
Failure to comply with the requirements set out in the Customs Act 1901 may result in various consequences. If an entity submits a false or misleading application for a TCO, they could face legal penalties under the relevant sections of the Act. While specific penalties are not detailed in the explanatory statement, breaches of such legislation typically involve substantial fines and, in severe cases, imprisonment. The severity of the penalties would depend on the nature and intent behind the breach, as well as any previous history of non-compliance. The TCO itself ensures that no person other than the Commonwealth is disadvantaged or imposed upon by the rights granted as of the date of registration, thereby protecting the interests of importers who can apply for refunds of duties on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).