EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608856
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.
Patricks Stevedoring Operations No 2 Pty Ltd applied for a TCO in respect of certain separating twin lift crane spreaders on 23 May 2006.
Instrument
TCO No 0608856 was made on 18 August 2006. It declares that those certain separating twin lift crane spreaders 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. 0608856 is taken to have come into force on 23 May 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 Commonwealth Parliament, establishes a framework for the administration of customs duties and the regulation of imports and exports in Australia. This Act includes provisions for Tariff Concession Orders (TCOs), which are designed to address economic or social needs by reducing or eliminating customs duty on certain goods. The Tariff Concession Instrument No. 0608856 was introduced to provide tariff concessions on certain separating twin lift crane spreaders, in response to an application by Patricks Stevedoring Operations No 2 Pty Ltd. This instrument was created to ensure that the application meets the core criteria, as outlined in the Act, which include the absence of substitutable goods produced in Australia. The policy objective is to facilitate the importation of these specific goods by applying a zero rate of duty, thereby reducing the financial burden on importers and potentially stimulating economic activity related to these goods.
Scope and Application
The Customs Act 1901 applies to entities and individuals involved in the importation of goods into Australia. Specifically, it governs the process of applying for and obtaining Tariff Concession Orders (TCOs) from the Chief Executive Officer of Customs (CEO), which provide for lower rates of customs duty on specified goods. The Act applies to any person who submits an application for a TCO, provided that the goods in question are not those specified in section 269SJ of the Act that cannot be subject to a TCO. The application process requires that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. The geographic scope of the Act is national, as it pertains to customs duties applied across Australia. The Act’s application can be extended or restricted through subordinate instruments, but the primary focus is on facilitating tariff concessions for specific goods that meet the outlined criteria. There are no stated exclusions, exemptions, or thresholds within the scope of the Act, other than those specified for ineligible goods under section 269SJ.
Key Provisions
The Customs Act 1901, particularly Part XVA, outlines a process by which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). Section 269F of the Act allows any person to apply to the CEO for a TCO concerning specific goods. If the CEO determines that the application pertains to goods not listed in section 269SJ, which are ineligible for a TCO, they must then assess whether the application meets the core criteria as defined in section 269C. For a TCO to be granted, it must be established that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. Definitions for terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively.
The obligations imposed by the Customs Act 1901 on the parties involved, particularly the CEO, include the responsibility to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to submit their views to the CEO. In this case, the CEO published the required notice and received no submissions opposing the TCO. The CEO must also ensure that the TCO does not adversely affect the rights of any person, except the Commonwealth, in relation to actions taken before the TCO registration date. The rights of importers will be positively affected, as they can apply for a refund of duty on goods imported since the TCO is deemed to have come into force.
In terms of penalties and consequences, the Customs Act 1901 does not explicitly outline specific offences or penalties related to breaches of the TCO provisions within the text provided. However, general penalties for breaches of customs regulations are applicable and can include fines and imprisonment. For example, under section 238 of the Customs Act, a person who knowingly makes a false statement in a document related to customs can be fined up to 10,000 penalty units or imprisoned for up to five years, or both. Additionally, section 240 of the Act provides for penalties for smuggling, which can include fines of up to 220,000 penalty units and imprisonment for up to 25 years. These general penalties would be applicable to any misuse or fraudulent activity related to the TCOs.