EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616333
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.
Gunnebo Industries Pty Ltd applied for a TCO in respect of certain wire ropes on 31 August 2006.
Instrument
TCO No 0616333 was made on 24 November 2006. It declares that those certain wire ropes 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. 0616333 is taken to have come into force on 31 August 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 Tariff Concession Instrument No. 0616333 was enacted in 2006 under the Customs Act 1901 to address the need for tariff concessions on specific goods that are not produced domestically. This instrument was introduced to allow for lower customs duties on goods that are not substituted by any Australian-produced equivalents, thereby encouraging the importation of goods that are not manufactured within the country. The Customs Act 1901, managed by the Parliament of Australia, aims to provide a streamlined process for tariff concessions through applications to the Chief Executive Officer of Customs, ensuring that the application meets specified criteria before a concession is granted. This particular instrument was created following an application by Gunnebo Industries Pty Ltd for tariff concessions on certain wire ropes, where it was determined that no substitutable goods were produced in Australia, thus justifying a tariff reduction from 5% to 0%.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This legislation allows for a reduced rate of customs duty on goods specified in a TCO. The application for a TCO is subject to certain criteria, primarily focusing on whether substitutable goods are produced in Australia, and must not pertain to goods excluded under section 269SJ. If the application meets the criteria set out in section 269C, the CEO is mandated to issue a written order specifying the applicable tariff item from Schedule 4 of the Customs Tariff Act 1995. Notably, the TCO does not affect existing rights or impose new liabilities on entities other than the Commonwealth, and it is applicable from the date the application is lodged. This mechanism ensures that the rights of importers are positively affected, including the ability to seek refunds for duties paid on eligible goods since the effective date of the concession.
Key Provisions
The main provisions of Tariff Concession Instrument No. 0616333 under the Customs Act 1901 are outlined in section 269F (2), which provides the mechanism for applying for a Tariff Concession Order (TCO). If an applicant, such as Gunnebo Industries Pty Ltd, applies for a TCO for certain goods like wire ropes, the Chief Executive Officer of Customs (CEO) must evaluate whether the application meets the core criteria, as per sections 269C and 269SJ. In this case, the CEO found that no substitutable goods were produced in Australia, satisfying the criteria, and subsequently issued TCO No. 0616333, which was published in the Gazette under section 269K(1).
The obligations imposed by the Act on the parties include the requirement for the CEO to assess the application against the core criteria and ensure that the goods do not fall under the restricted list in section 269SJ. The CEO is also mandated to publish the notice of the TCO application in the Gazette, inviting public submissions, as per subsection 269K(1). Gunnebo Industries Pty Ltd must ensure that their application is valid and that the goods are eligible under the scheme. The CEO must then make a written order if the application meets the criteria, which, in this case, led to the issuance of TCO No. 0616333.
Under the Customs Act 1901, any breach of the conditions or requirements outlined in the Tariff Concession Instrument can result in legal consequences. However, the specific section does not detail offences or penalties for non-compliance with the TCO provisions. Generally, under the Customs Act, breaches of customs laws can lead to civil and criminal penalties, including fines and imprisonment. For instance, under section 237A, penalties for offences involving fraud or knowingly making a false statement can be significant, with maximum penalties reaching up to $165,000 for corporations and $33,000 for individuals, along with potential imprisonment terms.