EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0611857
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.
Abigroup Constructions Pty Ltd applied for a TCO in respect of a certain aluminium helipad on 12 July 2006.
Instrument
TCO No 0611857 was made on 29 September 2006. It declares that those certain aluminium helipads 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. 0611857 is taken to have come into force on 12 July 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, addresses the issue of imposing tariffs on imported goods by providing a framework for tariff concession orders. These orders allow the Chief Executive Officer of Customs to grant lower rates of customs duty on specified goods if certain conditions are met. In particular, a tariff concession order may be made if the goods in question are not produced in Australia and have no substitutable equivalents domestically. This legislative framework aims to foster trade by reducing the cost of importing specific goods, thereby encouraging economic activity and potentially benefiting consumers and businesses alike.
The Tariff Concession Instrument No. 0611857, issued under the Customs Act 1901, provides an example of this framework in action. On 29 September 2006, the CEO granted a tariff concession order for certain aluminium helipads, reducing the duty on these goods from 5% to free. This concession was granted after determining that no substitutable goods were produced in Australia, aligning with the core criteria outlined in the Act. The order was published in the Gazette, inviting any objections, but none were received. Consequently, the concession took effect from the date the application was lodged, 12 July 2006, without retroactively affecting any pre-existing rights or imposing new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0611857 under the Customs Act 1901 applies to a specific type of goods, in this case certain aluminium helipads, and is directed towards entities or individuals seeking tariff concessions for these goods. The application of this instrument is contingent upon the Chief Executive Officer of Customs determining that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. The geographic reach of this Act is national, as it operates within the framework of federal Australian law, with the Customs Act 1901 providing the legislative foundation. The instrument does not exclude any particular entities or industries but rather focuses on the specific condition of the non-existence of substitutable Australian-made goods for the products concerned. Any exclusions are implicitly defined by the provisions of section 269SJ of the Act, which lists goods that cannot be subject to a tariff concession order. This Act may extend or restrict its application through subordinate instruments, which would need to be consistent with the overarching provisions of the Customs Act 1901.
Key Provisions
The key sections of Tariff Concession Instrument No. 0611857, made under the Customs Act 1901, are sections 269C, 269F, and 269P(3) (sections 269B and 269D also provide definitions). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application meets the core criteria set out in section 269C, and the goods are not specified in section 269SJ, the CEO must make a written order declaring that the goods are subject to a specified rate of customs duty (section 269P(3)). For Abigroup Constructions Pty Ltd's application concerning certain aluminium helipads, item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a zero rate of duty on these goods, down from the general rate of 5%.
The obligations imposed by this legislation primarily rest with the CEO of Customs. The CEO is required to consider any valid application for a TCO and to decide whether it meets the core criteria. If satisfied, the CEO must make a TCO. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. In this instance, the CEO did not receive any submissions.
Any breaches of the Customs Act 1901 or the Tariff Concession Instrument No. 0611857 could result in civil or criminal penalties. For example, section 256 of the Customs Act 1901 stipulates that any person who contravenes any provision of the Act, or any regulation or order made under the Act, is liable to a penalty of up to 10,000 penalty units for a corporation and 2,000 penalty units for an individual, or imprisonment for up to five years, or both. The precise nature and extent of any penalties would depend on the specific circumstances of the breach, including the intent and the extent of non-compliance. However, no specific penalties are mentioned in relation to this particular TCO.