EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618438
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.
Bristile Operations Pty Ltd applied for a TCO in respect of certain roller mill parts on 10 November 2006.
Instrument
TCO No 0618438 was made on 02 February 2007. It declares that those certain roller mill parts 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. 0618438 is taken to have come into force on 10 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 Tariff Concession Instrument No. 0618438, enacted in 2007 under the Customs Act 1901, was introduced to address the issue of applying tariff concessions to specific goods. The Customs Act 1901, administered by the Commonwealth Parliament, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The policy objective of this legislation is to ensure that the application of reduced customs duty rates to certain goods is handled effectively, provided the goods are not specified as ineligible under section 269SJ of the Act. This mechanism aims to support industries by reducing the cost of imported goods through tariff concessions, subject to the core criteria set out in section 269C of the Act. The explanatory statement details that Bristile Operations Pty Ltd applied for a TCO for certain roller mill parts, which was granted as no substitutable goods were being produced in Australia at the time of the application. The TCO took effect from the date of application, 10 November 2006, and provides a free rate of duty on the specified goods, significantly benefiting the rights of importers who can claim duty refunds for goods imported since the effective date.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These orders provide for a reduced rate of customs duty on specified goods, applicable to those who apply for such concessions and meet the core criteria outlined in the Act. An applicant, such as Bristile Operations Pty Ltd in this instance, must demonstrate that no substitutable goods are produced in Australia at the time of application, ensuring that the concession does not undermine domestic production. The CEO's decision to grant a TCO is contingent upon satisfying these criteria, after which the CEO issues a written order specifying the reduced duty rate applicable to the goods in question. The TCO does not affect any pre-existing rights or liabilities of persons other than the Commonwealth, but it does entitle importers to apply for duty refunds on goods imported since the effective date of the TCO. The Act further mandates the CEO to publish notices in the Gazette inviting public submissions on TCO applications, although no submissions were received for this particular order. The TCO comes into effect on the date the application is lodged, providing immediate benefits to importers while ensuring the orderly administration of the tariff concession scheme.
Key Provisions
The Customs Act 1901 (the Act) allows for the creation of Tariff Concession Orders (TCOs) through Part XVA, which can lower the customs duty on specific goods (section 269F). For Bristile Operations Pty Ltd, this means that the application for a TCO regarding certain roller mill parts led to a tariff concession, declaring that these parts are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, thus reducing the duty from 5% to free (section 269P(3)). To qualify, the Chief Executive Officer of Customs (the CEO) must be satisfied that no substitutable goods are produced in Australia (section 269C). The CEO's decision to issue TCO No. 0618438 was based on this criterion being met for the specific roller mill parts in question.
The Act imposes several obligations on the parties involved. The CEO is required to decide if an application for a TCO meets the core criteria and to publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)). For Bristile Operations Pty Ltd, the obligation was to submit a valid application. Additionally, once a TCO is issued, importers of the affected goods can apply for a refund of duties paid since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations. The Act ensures that the TCO does not affect existing rights or impose new liabilities on individuals or entities other than the Commonwealth.
Breaching the conditions set by the Customs Act 1901 can lead to civil or criminal consequences. While the specific penalties are not detailed in the Act, breaches of similar provisions typically involve fines that can be substantial, depending on the nature and severity of the offence. For instance, knowingly providing false information in an application could lead to fines up to $22,200 for individuals and $111,000 for bodies corporate, as per the Crimes Act 1914. Additionally, failure to comply with the TCO requirements or attempting to evade duties could result in criminal charges under the Customs Act, with penalties including imprisonment.