EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619299
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.
Krinner Australia applied for a TCO in respect of certain steel foundation screws on 01 December 2006.
Instrument
TCO No 0619299 was made on 02 March 2007. It declares that those certain steel foundation screws 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 10%. 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. 0619299 is taken to have come into force on 01 December 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 Australian Parliament, established a framework for the regulation of customs and excise, including the ability to grant tariff concessions through Tariff Concession Orders (TCOs). The 2007 Tariff Concession Instrument No. 0619299 was introduced to address the specific needs of businesses seeking relief from customs duties on certain imported goods, in this case steel foundation screws, where no domestic alternatives were produced. The instrument aims to provide a lower rate of customs duty for these goods, facilitating economic activity and potentially benefiting importers by allowing them to apply for duty refunds on goods imported since the effective date of the order, without imposing any new liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that apply lower rates of customs duty on certain goods. This legislative provision applies to any person who can demonstrate that the goods they wish to import are not being produced in Australia and that there are no substitutable goods available domestically. The application process requires the applicant to meet core criteria, including the absence of domestic production of substitutable goods, as defined under the Act. The geographic scope of this legislation is national, applying across all states and territories in Australia. The TCOs themselves have no retrospective effect and do not disadvantage any person, including importers, who may benefit from duty refunds on goods imported since the TCO is deemed to have come into force on the date of the application. However, goods specified in section 269SJ of the Customs Act 1901 are excluded from the TCO scheme. The Act may also be extended or restricted through subordinate instruments, such as regulations, although this specific instance does not impose any additional liabilities or affect pre-existing rights adversely.
Key Provisions
The main operative sections of this legislation, found under Part XVA of the Customs Act 1901, establish the framework for Tariff Concession Orders (TCOs). Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. The CEO then assesses whether the application meets the core criteria set out in section 269C, which includes ensuring that no substitutable goods were produced in Australia on the date the application was lodged (section 269D). If the CEO determines that the application meets these criteria, they must make a written order (section 269P(3)) that specifies the reduced duty rate for the goods in question.
The Act imposes several obligations on the parties involved. The CEO is obligated to assess the validity of TCO applications based on the criteria outlined in the Act. This includes ensuring that the goods in question are not substitutable by any goods produced in Australia. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO if they believe it should not be granted (section 269K(1)). This process is designed to ensure transparency and allow for public scrutiny of the decision-making process.
Breaching the provisions of the Customs Act 1901 can lead to various legal consequences. The Act does not explicitly outline specific offences or penalties related to the TCO process, but general breaches of the Customs Act can result in criminal or civil penalties. For example, knowingly importing goods in contravention of the Act can lead to criminal charges, including fines and imprisonment. Civil penalties may also be imposed for breaches, which can vary depending on the severity and nature of the offence. The maximum penalties for breaches of the Customs Act can include fines up to $22,200 for individuals and significantly higher amounts for corporations, along with potential imprisonment terms.
The explanatory statement indicates that the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration. This means that while the rights of importers will be positively impacted by the concession, no existing liabilities or rights of non-Commonwealth entities will be adversely affected by the TCO. Furthermore, under the Regulations, importers can apply for a refund of duty on goods imported since the TCO is taken to have come into force, providing a financial benefit to those who have already imported the goods before the official concession was registered. This ensures that the benefits of the tariff concession are not lost to those who acted in good faith prior to the official registration of the TCO.