EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618153
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.
Berendsen Fluid Power Pty Ltd applied for a TCO in respect of certain waterblast hoses on 2 November 2006.
Instrument
TCO No 0618153 was made on 19 January 2007. It declares that those certain waterblast hoses 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. 0618153 is taken to have come into force on 2 November 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, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This mechanism aims to address the issue of ensuring fair trade practices by providing tariff concessions on certain goods, subject to specific criteria. The Act was introduced to create a more balanced approach in the customs duty imposition, ensuring that Australian industries do not suffer from undue competition where no suitable domestic production exists. The TCO scheme operates under the core principle that if goods sought for tariff concession are not produced in Australia, a lower customs duty can be applied. This was demonstrated in the case of Tariff Concession Instrument No. 0618153, which was made to provide a zero per cent duty on certain waterblast hoses, effectively reducing the general duty rate from 5% to 0%. The policy objective of this legislative instrument is to facilitate smoother trade processes while protecting local industries where applicable.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the process through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). These orders apply to goods specified in the application and allow for a lower rate of customs duty for those goods if certain criteria are met. An application for a TCO can be made by any person, provided the goods in question are not excluded under section 269SJ of the Act, which includes goods like alcoholic beverages and tobacco products. The CEO evaluates whether the application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business, as defined in sections 269C, 269D, and 269E of the Act. If the criteria are satisfied, the CEO is required to issue a written order reducing the customs duty rate for the specified goods. In the case of Tariff Concession Instrument No. 0618153, Berendsen Fluid Power Pty Ltd successfully applied for a TCO for certain waterblast hoses, resulting in a duty rate reduction from 5% to 0%. The instrument came into effect on the date of application, 2 November 2006, without affecting existing rights or imposing new liabilities on any person.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0618153, which relates to the Customs Act 1901, primarily revolve around section 269F (1) and section 269P (3). Section 269F (1) allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) concerning specific goods. If the CEO is satisfied that the application is valid and not in respect of goods listed in section 269SJ, they must determine if the application meets the core criteria outlined in section 269C. If the CEO is satisfied that the application meets the criteria, they must then make a written order, as per section 269P (3), declaring that the goods in question are subject to a specified rate of duty in Schedule 4 to the Customs Tariff Act 1995. For the instrument in question, the CEO determined that the waterblast hoses in question were subject to a 0% rate of duty, rather than the general rate of 5%.
The Act imposes several obligations on both the CEO and the applicant. For the CEO, it is mandatory to consider applications for TCOs and to ensure that the application meets the core criteria as defined in section 269C. Additionally, the CEO must publish a notice in the Gazette, inviting submissions from any person who may have objections to the making of the TCO, as required by subsection 269K(1). For the applicant, the obligation lies in ensuring that their application for a TCO is valid and meets the criteria specified in the Act. The CEO in this case received no submissions in response to the published notice.
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to TCO applications. However, any actions that contravene the provisions of the Customs Act 1901 or the Customs Tariff Act 1995 could potentially lead to enforcement actions, including fines or other penalties under the respective Acts. For instance, any misrepresentation or fraudulent application could lead to penalties under the Crimes Act 1914 or other relevant legislation. The TCO itself does not impose any liabilities on any person, as clarified under the Act, and ensures that the rights of importers will be beneficially affected, particularly in terms of duty refunds under the Regulations.