EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516748
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.
Joncor Pty Ltd applied for a TCO in respect of certain brass wire on 5 December 2005.
Instrument
TCO No 0516748 was made on 03 March 2006. It declares that those certain brass wire 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. 0516748 is taken to have come into force on 5 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 Customs Act 1901 was enacted by the Australian Parliament to facilitate the administration of customs duties and to regulate the importation and exportation of goods. The Tariff Concession Instrument No. 0516748, introduced on 3 March 2006, addresses the problem of ensuring that Australian importers of certain brass wire can access these goods at a lower duty rate, thereby supporting the economic competitiveness of businesses relying on these materials. This instrument was created under section 269F of the Customs Act, which allows for Tariff Concession Orders to be made by the Chief Executive Officer of Customs, provided that no substitutable goods are produced in Australia. The policy objective is to ensure that Australian businesses can import specific goods at a reduced tariff rate, provided that no domestic production of these goods exists, thus encouraging efficient trade practices and economic growth.
Scope and Application
The Tariff Concession Instrument No. 0516748 under the Customs Act 1901 applies specifically to goods in relation to which a Tariff Concession Order (TCO) has been requested and subsequently granted by the Chief Executive Officer of Customs (CEO). This Act allows for a lower rate of customs duty to be applied to goods that are subject to a TCO, provided certain conditions are met, including the absence of substitutable goods produced in Australia. The Act applies to any person or entity that seeks to benefit from a TCO by applying for a reduction in customs duty on specific goods, as long as these goods do not fall under the categories specified in section 269SJ of the Act, which are ineligible for tariff concessions. The geographical scope of the Act is national, as it pertains to the Customs Act 1901, which is a Commonwealth Act. The application of the Act can be extended or modified through subordinate instruments, which may provide further clarification or detail on the types of goods eligible for concessions or the process for applying for such concessions.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0516748 under the Customs Act 1901 (section 269P(3)) detail the process by which the Chief Executive Officer of Customs (CEO) must make a written order (Tariff Concession Order, or TCO) when certain conditions are met. Specifically, section 269C outlines the core criteria for a TCO application, which is satisfied if no substitutable goods were produced in Australia on the day the application was lodged. If the CEO determines that the application meets these criteria, they must issue a TCO, as seen in the case of Joncor Pty Ltd’s application for certain brass wire, which was made effective on 5 December 2005 (section 269P(3)).
The Act imposes specific obligations on both the CEO and applicants for a TCO. For the CEO, the primary obligation is to ensure that any TCO application that meets the core criteria is processed and a written order is issued. The CEO must also publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made (subsection 269K(1)). In this instance, no submissions were received. For applicants, the obligation is to provide a valid application that clearly demonstrates compliance with the core criteria, such as the absence of substitutable goods in Australia.
Failure to comply with the requirements of the Act or the TCO can result in penalties and legal consequences. While the explanatory statement does not detail specific offences, breaches of customs regulations generally can lead to civil and criminal penalties. For example, under the Customs Act 1901, the imposition of incorrect duty rates or fraudulent claims can attract fines and imprisonment. The exact penalties depend on the nature and severity of the breach, but they can include substantial fines and, in cases of deliberate or repeated infringements, imprisonment.