EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619310
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.
Moxham Industrial Pty Ltd applied for a TCO in respect of certain safety harness fittings on 05 December 2006.
Instrument
TCO No 0619310 was made on 02 March 2007. It declares that those certain safety harness fittings 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. 0619310 is taken to have come into force on 05 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 Parliament of Australia, addresses the need to provide relief to importers of certain goods by allowing for tariff concessions. Specifically, Part XVA of the Act establishes a framework under which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) that lower the customs duty on specified goods. The explanatory statement for Tariff Concession Instrument No. 0619310, made under this Act, pertains to an application by Moxham Industrial Pty Ltd for a TCO concerning certain safety harness fittings. The CEO determined that no substitutable goods were produced in Australia, thus meeting the core criteria, and subsequently issued the TCO which exempts these fittings from the general duty rate, effectively making the duty rate free. This legislative measure aims to facilitate trade by reducing the cost burden on importers of specified goods, thereby encouraging their import into Australia without imposing any liabilities on other parties.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply a reduced rate of customs duty on certain goods. This legislative framework is invoked when an applicant, such as Moxham Industrial Pty Ltd in this case, submits an application for a TCO, and the CEO determines that the application aligns with the core criteria. These criteria necessitate, among other things, that no substitutable goods are produced in Australia in the ordinary course of business. If the CEO approves the application, a written order is issued, specifying the goods subject to the concession and the applicable tariff item, as evidenced by TCO No. 0619310 for safety harness fittings. This instrument was published in the Gazette, inviting submissions from interested parties, none of which were received, thus allowing the TCO to take effect from the date of the application. The Act ensures that the TCO does not retroactively disadvantage any person or impose new liabilities, thereby safeguarding the rights of importers who may benefit from duty refunds on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0619310, which is based on the Customs Act 1901, include sections 269C, 269F, 269B, 269D, 269E, 269P, 269K, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, and that the goods are not specified in section 269SJ, they must make a written TCO (section 269P). This TCO applies to the goods as if it had come into force on the day the application was lodged (section 269S). The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (section 269K).
The Act imposes several obligations on the parties involved. The CEO is required to assess whether a TCO application meets the core criteria and whether the goods are eligible under section 269SJ. If satisfied, the CEO must make a written TCO and publish a notice in the Gazette. Importers and other stakeholders must ensure their submissions are made within the stipulated timeframe if they have concerns about the TCO. The CEO must consider all submissions and make a decision based on the information provided.
Breaching the provisions of the Customs Act 1901 can result in civil or criminal penalties. While the specific offences, penalties, or consequences are not detailed in the explanatory statement, under Australian law, breaches of customs regulations generally carry fines and potential imprisonment. For example, knowingly making a false statement in a customs declaration can result in a fine of up to $11,000 or imprisonment for up to two years, or both, under section 238 of the Customs Act 1901. The penalties for more serious offences, such as smuggling, can be significantly higher and include substantial fines and lengthy imprisonment terms. The Act also allows for the recovery of unpaid duty and the imposition of additional penalties for non-compliance.