EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516777
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.
Glide Industries Pty Ltd applied for a TCO in respect of certain sailboards on 08 December 2005.
Instrument
TCO No 0516777 was made on 03 March 2006. It declares that those certain sailboards 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. 0516777 is taken to have come into force on 08 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, enacted by the Commonwealth Parliament, serves as the foundational legal framework governing customs in Australia. Part XVA of this Act introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to provide tariff relief for certain goods. The Tariff Concession Instrument No. 0516777 was introduced to address a specific gap by providing tariff concessions for certain sailboards, as requested by Glide Industries Pty Ltd. The CEO determined that these sailboards qualified for a tariff concession, as no substitutable goods were produced in Australia at the time of the application. This instrument was designed to ensure that the rights of importers are beneficially affected while avoiding any disadvantage to other persons and imposing no new liabilities.
Scope and Application
The Customs Act 1901, specifically through Part XVA, provides a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that apply lower rates of customs duty to certain goods. These TCOs are applicable to goods specified in the order, provided that the application for the concession meets the core criteria outlined in section 269C of the Act. The criteria require that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. The application process includes a mandatory publication in the Gazette inviting submissions from interested parties, although no submissions were received in relation to TCO No. 0516777. This order, which came into force on the date the application was lodged, specifically exempts certain sailboards from the general 5% duty rate, granting them duty-free status. Notably, the TCO does not affect pre-existing rights or impose any liabilities on persons other than the Commonwealth.
Key Provisions
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). A TCO can be applied for by any person who wishes to have a lower rate of customs duty applied to certain goods (s 269F). If the CEO determines that the goods in question do not fall under the prohibited list outlined in section 269SJ, they must assess whether the application meets the core criteria specified in section 269C. This involves verifying that, on the date of application, no substitutable goods were being produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the application satisfies these criteria, the CEO must issue a written order (TCO) specifying the goods and the applicable item in Schedule 4 to the Customs Tariff Act 1995 (s 269P(3)).
Under this scheme, the CEO has specific obligations when processing TCO applications. Firstly, they must ensure that the goods are not on the prohibited list (s 269SJ) and then check if the application meets the core criteria (s 269C). If the criteria are met, they must issue a TCO (s 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit any objections to the TCO within a specified period (s 269K(1)). In the case of TCO No 0516777, the CEO did not receive any submissions.
Any person who fails to comply with the requirements set out in the Customs Act 1901 or the associated regulations may face various consequences. For instance, if a person knowingly or recklessly makes a false or misleading statement in an application for a TCO, they may be subject to civil or criminal penalties, including fines and imprisonment, as stipulated in the relevant sections of the Customs Act 1901. The exact penalties depend on the nature and severity of the offence but can include substantial fines and imprisonment terms as outlined in the relevant sections of the Act. It is important to note that the TCO does not affect any existing rights or impose new liabilities on individuals except the Commonwealth, and it does not disadvantage any person who was acting in good faith prior to the registration of the TCO.