EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605456
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.
Australasian Hmt Pty Ltd applied for a TCO in respect of certain geodesic domes parts on 21 March 2006.
Instrument
TCO No 0605456 was made on 9 June 2006. It declares that those certain geodesic domes parts 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. 0605456 is taken to have come into force on 21 March 2006.
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 Parliament of Australia, provides a framework for the administration of customs and excise duties. This Act was introduced to streamline the customs duty processes and provide flexibility for the importation of goods. Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs), which can lower the rate of customs duty on certain goods, provided specific criteria are met. The explanatory statement for Tariff Concession Instrument No. 0605456, made on 9 June 2006, outlines the procedure followed to grant a TCO for certain geodesic dome parts, reducing their duty from 5% to 0%. The policy objective of this instrument is to facilitate the importation of these goods by removing duty barriers, thus supporting businesses that rely on these imports without imposing any new liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Customs Act 1901 applies to the process of making Tariff Concession Orders (TCOs) which are intended to reduce the customs duty on certain imported goods. This Act specifically applies to individuals or entities seeking to import goods that qualify for a tariff concession. The application process involves ensuring that the goods for which a concession is sought are not substitutable by goods produced in Australia in the ordinary course of business, as per sections 269C and 269D of the Act. The geographic reach of this legislation is national, as it involves the Commonwealth of Australia and its customs processes. However, there are specific exclusions outlined in section 269SJ of the Act which detail the types of goods that cannot be subject to a TCO. The application of this Act can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty applicable to goods under a TCO. The instrument in question, TCO No. 0605456, applies to certain geodesic dome parts and was effective from the date of the application on 21 March 2006.
Key Provisions
The primary operative sections of the Customs Act 1901, specifically in relation to Tariff Concession Orders (TCOs), are sections 269C, 269F, and 269S (subsection 269S(1)). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. If the CEO determines that the application meets the core criteria outlined in section 269C, which includes the condition that no substitutable goods were produced in Australia at the time of application, a TCO must be issued. Section 269S(1) establishes that the TCO is effective from the date the application was lodged. In this case, TCO No. 0605456 was issued on 9 June 2006 for certain geodesic dome parts, reducing the duty rate from 5% to 0%.
The Act imposes several obligations and requirements on both applicants and the CEO. For applicants, the primary obligation is to ensure their application for a TCO is valid and meets the core criteria, which includes demonstrating that no substitutable goods are produced in Australia. The CEO must then decide whether the application meets these criteria and, if so, issue a written order. The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In this instance, the CEO did not receive any submissions.
Breaching the requirements of the Customs Act 1901 can result in various penalties and consequences. While the specific penalties are not detailed in the Explanatory Statement, breaches of customs regulations generally can result in significant civil and criminal penalties. These may include fines and imprisonment, depending on the severity and intent of the breach. For instance, knowingly making false statements or representations in an application for a TCO could lead to criminal charges. Compliance with the Act is crucial to avoid these adverse outcomes.