EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701746
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.
Kingston Bridge Engineering Pty Ltd applied for a TCO in respect of certain vacuum tubing formers on 02 February 2007.
Instrument
TCO No 0701746 was made on 30 April 2007. It declares that those certain vacuum tubing formers 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. 0701746 is taken to have come into force on 02 February 2007.
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 was enacted by the Australian Parliament to regulate the importation and exportation of goods within Australia. The Act was introduced to address the need for a structured approach to managing customs duties and ensuring compliance with relevant regulations. Part XVA of the Customs Act 1901 provides the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders allow for lower rates of customs duty on specified goods, provided certain criteria are met. Specifically, a TCO can be applied for if the goods in question are not specified in section 269SJ and meet the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia at the time the application was lodged. The policy objective is to support Australian industries by ensuring that certain imported goods do not compete with locally produced alternatives, thereby promoting fair trade and economic stability.
Scope and Application
The Tariff Concession Instrument No. 0701746, issued under the Customs Act 1901, pertains to the concession of customs duties for certain vacuum tubing formers. This instrument applies to any entity or person importing these specified goods into Australia. The scope of the Act extends to ensuring that no substitutable goods are produced in Australia in the ordinary course of business at the time the application for tariff concession is made, thereby justifying the concession. The instrument’s jurisdictional reach is national, as it operates under the authority granted by the Commonwealth of Australia. Any exclusions or exemptions are specified within the confines of the Customs Act 1901, particularly in section 269SJ which lists goods ineligible for tariff concessions. The instrument may also extend its application through subordinate instruments as required, ensuring compliance and clarity in the implementation of tariff concessions.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). This legislative provision allows for the application of a lower rate of customs duty on goods that are the subject of a TCO. An application for a TCO can be made by any person under section 269F, provided that the goods in question are not those specified in section 269SJ, which are ineligible for TCOs. The CEO's decision to grant a TCO hinges on whether the application meets the core criteria outlined in section 269C. The core criteria require that, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for key terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively.
Under the Act, the CEO has a duty to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to submit any objections to the making of the TCO (subsection 269K(1)). If no submissions are received, the CEO is required to proceed with the order. In the case of TCO No. 0701746, which pertains to certain vacuum tubing formers, no objections were lodged following the notice, allowing the CEO to proceed with the order. The TCO is effective as of the date the application was lodged, which for TCO No. 0701746, was 02 February 2007 (subsection 269S(1)). This means that the concessional duty rate applies retroactively from that date, although it does not affect the rights of any person other than the Commonwealth in respect of actions taken prior to the registration of the TCO.
Breaching the conditions set out in the Customs Act 1901 or failing to comply with the requirements of a TCO can lead to legal consequences. For instance, if an entity knowingly makes a false statement or omission in an application for a TCO, it may be subject to penalties under section 274 of the Act. The penalties for such offences can include fines, with the exact amount determined by the severity of the breach. Additionally, there are civil consequences for non-compliance, which can include the imposition of a financial penalty or the requirement to pay any additional duty that should have been paid had the concession not been granted. These provisions are designed to ensure that the integrity of the tariff concession scheme is maintained and that all parties comply with the obligations and requirements of the Act.