EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0614891
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.
Bristle Operations Pty Ltd applied for a TCO in respect of certain kiln furniture on 30 October 2006.
Instrument
TCO No 0614891 was made on 19 January 2007. It declares that those certain kiln furniture are goodsis a commodity 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. 0614891 is taken to have come into force on 30 October 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 was enacted by the Parliament of Australia to regulate the import and export of goods in Australia and to provide for the collection of duties and taxes on those goods. The Act includes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to provide tariff concessions on certain goods. The 2007 Tariff Concession Instrument No. 0614891 was introduced to address the specific needs of Bristle Operations Pty Ltd, which applied for a tariff concession on certain kiln furniture. The CEO determined that no substitutable goods were produced in Australia, satisfying the core criteria for a tariff concession. As a result, the CEO issued a TCO, which granted a tariff concession on these goods, reducing the duty from the general rate of 5% to free. The policy objective is to facilitate the import of goods that are not produced domestically, thereby supporting industries that rely on imported materials.
Scope and Application
The Tariff Concession Instrument No. 0614891 under the Customs Act 1901 applies to the specific category of kiln furniture sought by Bristle Operations Pty Ltd, which is granted a tariff concession order (TCO) by the Chief Executive Officer of Customs. This concession results in a reduction of customs duty for these goods, provided the application meets the core criteria outlined in the Act. The legislation applies to any entity or person importing these goods, thereby granting them tariff relief as stipulated in the instrument. The TCO is effective from the date the application was lodged, which is 30 October 2006, and does not impact the rights of any person except to confer the benefit of reduced customs duties on the specified goods. The Act’s provisions ensure that no person other than the Commonwealth is disadvantaged or imposed with liabilities for actions taken before the instrument's registration date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0614891 (TCO No. 0614891) are detailed within Part XVA of the Customs Act 1901 (the Act). Section 269F allows for the application to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). This section permits a person to request a TCO for goods, provided they are not those specified in section 269SJ of the Act, which lists goods ineligible for a TCO. If the CEO determines that the application meets the core criteria, as outlined in section 269C, the CEO is mandated to issue a TCO under section 269P(3). This order declares that the specified goods are subject to a prescribed rate of duty in Schedule 4 to the Customs Tariff Act 1995 (the Tariff).
The Act imposes specific obligations on both the applicant and the CEO. For applicants, the primary obligation is to ensure that their application for a TCO is valid and not in respect of goods listed in section 269SJ. The CEO, on the other hand, must assess whether the application meets the core criteria and subsequently issue a TCO if satisfied. This involves verifying that no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D and 269E of the Act. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties, as per subsection 269K(1) of the Act. In this case, the CEO did not receive any submissions.
Under the Customs Act 1901, breaches of the provisions regarding TCOs may incur both civil and criminal penalties. Specifically, section 283 of the Act provides for penalties, including fines, imprisonment, or both, for contraventions. The maximum penalties depend on the severity of the breach but can include significant fines and imprisonment terms. For example, serious breaches may result in fines up to $22,000 and imprisonment for up to two years. Additionally, section 284A of the Act stipulates that a person who makes a false statement in an application for a TCO may be liable to penalties under section 283. The precise penalties will depend on the nature and extent of the false statement.
In summary, TCO No. 0614891 is a legal instrument that applies a zero duty rate to certain kiln furniture, effective from the date of the application on 30 October 2006. The CEO must ensure that the application meets the core criteria before issuing the TCO. Both the applicant and the CEO have specific obligations under the Customs Act 1901. The Act also provides for civil and criminal penalties for breaches, with the severity of the penalties depending on the nature and extent of the breach.