EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619387
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.
Gorter Hatches Pty Ltd applied for a TCO in respect of certain hatches on 5 December 2006.
Instrument
TCO No 0619387 was made on 2 March 2007. It declares that those certain hatches 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. 0619387 is taken to have come into force on 5 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, as amended, introduced a scheme under which Tariff Concession Orders (TCOs) could be made by the Chief Executive Officer of Customs, allowing for a lower rate of customs duty on specified goods. This was enacted to address the gap in facilitating trade by reducing customs duties on certain imported goods, provided they met the core criteria and were not substitutable by Australian-produced goods. The Tariff Concession Instrument No. 0619387 was established by the Parliament of Australia and aims to provide a concession on the duty rate for specific goods, such as certain hatches, as applied by Gorter Hatches Pty Ltd. This measure was introduced to benefit importers by lowering the customs duty rate to zero, effective from the date of the application, without imposing any new liabilities or disadvantaging existing rights.
Scope and Application
The Customs Act 1901, under its Part XVA, establishes a scheme for the creation of Tariff Concession Orders (TCO) that can be made by the Chief Executive Officer of Customs. This Act applies to individuals or entities seeking lower rates of customs duty on goods by applying for a TCO, provided the goods are not specified in section 269SJ of the Act which lists those ineligible for tariff concessions. The application process requires the CEO to determine if the application meets core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business. Once a TCO is granted, it applies to the specific goods as designated in the order, thereby altering the rate of duty applicable to these goods as outlined in the Customs Tariff Act 1995. The TCO does not affect the rights of any person adversely if applied to events occurring before the TCO's registration date and does not impose any liabilities on any person, except the Commonwealth. The scope of the Act is national, as it pertains to federal customs legislation and its application is consistent across Australia.
Key Provisions
The Tariff Concession Instrument No. 0619387 operates under the Customs Act 1901, specifically within the framework set by Part XVA, which deals with Tariff Concession Orders (TCOs) (section 269F). This legislation allows for the application of lower customs duty rates on goods specified in a TCO, provided the application meets certain criteria. For instance, if no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged, a TCO can be granted (section 269C). This particular instrument, TCO No. 0619387, was applied to certain hatches by Gorter Hatches Pty Ltd on 5 December 2006 and came into force on the same date (subsection 269S(1)).
The obligations imposed on parties under this Act include the requirement for applicants to ensure that their applications for TCOs meet the core criteria specified in the Act, such as the non-production of substitutable goods in Australia (section 269C). The Chief Executive Officer of Customs (CEO) must then decide whether the application meets these criteria and, if satisfied, make a written order specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods (subsection 269P(3)). Additionally, the CEO is obligated to publish a notice in the Gazette inviting submissions from any interested parties who might have reasons why the TCO should not be made (subsection 269K(1)). In this case, no submissions were received, and the TCO was granted.
In terms of offences and penalties, the Act does not explicitly outline specific penalties for breaches related to TCO applications. However, general compliance with the Customs Act 1901 is crucial, as any significant non-compliance could potentially lead to broader legal consequences under other sections of the Act or related legislation. For example, false statements or misrepresentations in an application could attract penalties under sections dealing with fraudulent conduct.
The consequences of a breach generally depend on the nature and severity of the non-compliance. For instance, if a person knowingly provides false information in their application, they might face civil or criminal penalties as stipulated elsewhere in the Customs Act 1901 or under other relevant Australian laws. The Act ensures that the rights of importers will be beneficially affected, and they can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not impose any liabilities on any person, other than the Commonwealth, in respect of anything done or omitted before the date of registration.