EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516794
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.
Beaver Sales Pty Ltd applied for a TCO in respect of certain wire rope ferrules on 16 December 2005.
Instrument
TCO No 0516794 was made on 3 March 2006. It declares that those certain wire rope ferrules 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. 0516794 is taken to have come into force on 16 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 Australian Parliament, provides a framework for the administration of customs duties and the regulation of imports and exports. One of the mechanisms established under this Act is the Tariff Concession Order (TCO), which allows for the reduction or exemption of customs duty on certain goods. This is particularly relevant in cases where substitutable goods are not produced in Australia, thereby avoiding any negative impact on local industries. The Tariff Concession Instrument No. 0516794 was introduced to address the specific needs of businesses such as Beaver Sales Pty Ltd, which sought a concession on wire rope ferrules. The instrument was enacted to provide a zero percent duty rate on these goods, effective from the date of the application, 16 December 2005, while ensuring that no existing rights or liabilities of any parties were adversely affected. This initiative aligns with the policy objective of supporting Australian businesses by reducing import costs where feasible and appropriate.
Scope and Application
The Tariff Concession Instrument No. 0516794 under the Customs Act 1901 applies to specific goods that are the subject of a Tariff Concession Order (TCO), in this case, certain wire rope ferrules. The act applies to individuals and entities, specifically those who import these goods into Australia, by providing them with a lower rate of customs duty. This concession is granted if the Chief Executive Officer of Customs determines that no substitutable goods were produced in Australia on the day the TCO application was lodged, ensuring that the import of these goods does not negatively impact local production. The geographic reach of this legislation is national, as it applies across Australia, and it is administered under Commonwealth law. The application of the TCO does not extend to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions, nor does it impose any liabilities on individuals or entities other than the Commonwealth. The TCO came into effect on the date of application, 16 December 2005, and its application is not retroactive, thus not affecting any rights or imposing liabilities for actions prior to its enactment.
Key Provisions
The main operative sections of this legislation under the Customs Act 1901 (section 269F) provide that an application may be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of certain goods. If the CEO is satisfied that the application is valid and meets the core criteria (section 269C), a TCO may be made. This order effectively grants a tariff concession, which in this case, results in a reduction of the customs duty from 5% to 0% for the specified goods (section 269P(3)). The legislation also requires that, upon receiving a valid TCO application, the CEO must publish a notice in the Gazette inviting any person who might object to the making of the TCO to submit their reasons to the CEO (subsection 269K(1)). The TCO is deemed to have come into force on the day the application was lodged (subsection 269S(1)).
Under the Customs Act 1901, the CEO has the obligation to assess whether a TCO application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The CEO must also publish a notice in the Gazette inviting objections to the TCO if any exist (subsection 269K(1)). In this case, the CEO did not receive any objections, indicating that the application was unopposed. The CEO's role is further defined by the need to consider the definitions of "goods produced in Australia", "ordinary course of business", and "substitutable goods" as outlined in the Act (sections 269D, 269E, and the definition provided in section 269B).
If a person or entity fails to comply with the requirements of the Customs Act 1901 or the Tariff Concession Instrument, they may be subject to penalties. The specific penalties for breaches of customs regulations, including those related to TCOs, are not detailed in the provided excerpt. However, breaches of the Customs Act 1901 can generally result in civil penalties, criminal charges, or both, depending on the severity and intent of the breach. The maximum penalties can include fines and imprisonment, as outlined in the relevant sections of the Customs Act 1901 and the Customs (Prohibited Imports) Regulations 1956. The specific penalties would be determined based on the nature of the breach and the applicable provisions of the Act.