EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702041
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.
Connex Loading Systems Pty Ltd applied for a TCO in respect of certain petroleum marine loaders on 09 February 2007.
Instrument
TCO No 0702041 was made on 04 May 2007. It declares that those certain petroleum marine loaders 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. 0702041 is taken to have come into force on 09 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, enacted by the Australian Parliament, establishes a framework for administering customs duties, including the ability to provide tariff concessions through Tariff Concession Orders (TCOs). These concessions lower the customs duty on specified goods, benefiting importers by reducing their costs and encouraging the importation of goods that are not produced domestically. TCO No. 0702041 was introduced to provide a tariff concession for certain petroleum marine loaders, effective from the date of the application, 09 February 2007. The concession was granted as no substitutable goods were produced in Australia at the time of the application, thus meeting the core criteria set out in the Act. This measure supports the policy objective of fostering efficient trade practices and reducing the financial burden on importers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to individuals or entities that seek to apply for a TCO in relation to goods that are not produced in Australia and for which no suitable domestic substitutes exist. The CEO evaluates these applications against core criteria stipulated in sections 269C, 269D, and 269E of the Act to determine if the application is eligible for a TCO. Successful applications lead to the imposition of a lower rate of customs duty on the specified goods, as outlined in the Customs Tariff Act 1995. Notably, the application of a TCO does not adversely affect the rights of any person other than the Commonwealth, nor does it impose any liabilities on individuals or entities for actions taken prior to the TCO's registration. This instrument applies on a Commonwealth level and is effective from the date the application for the TCO is lodged.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0702041 are sections 269C, 269P, and 269S of the Customs Act 1901. Section 269C outlines the core criteria that an application for a Tariff Concession Order (TCO) must meet. This includes the requirement that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, a written order declaring the goods subject to the application will be issued. Finally, section 269S stipulates that a TCO is taken to have come into force on the day the application for the TCO was lodged, which means that any applicable tariffs are effective from that date.
The Act imposes several obligations and requirements on the parties involved. The CEO of Customs must ensure that any application for a TCO is assessed against the core criteria specified in section 269C. This includes verifying that no substitutable goods were produced in Australia at the time of application. Additionally, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit objections or reasons why the TCO should not be granted, as per section 269K. The CEO must also consider any submissions received and make a decision based on the evidence provided.
Failure to comply with the provisions of the Customs Act 1901 can lead to various consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs regulations generally attract civil and criminal penalties. These can include fines and imprisonment for individuals, as well as financial penalties for corporate entities. The maximum penalties can vary significantly depending on the nature and severity of the breach, as outlined in other sections of the Customs Act and related regulations.
The Tariff Concession Instrument No. 0702041 declares that certain petroleum marine loaders are subject to a concessional rate of customs duty. The general rate of duty for these goods is 5%, but the TCO reduces this rate to free. This means that importers of these goods will not be required to pay customs duty on them, provided they comply with all other relevant requirements under the Customs Act. The instrument does not impose any liabilities on individuals or entities, nor does it affect any rights as at the date of registration.
The commencement date of the TCO is the day on which the application was lodged, in this case, 9 February 2007. This means that any duties payable on these goods from that date onwards are subject to the concessional rate. Importers can apply for a refund of duty paid on goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations. This provides a financial benefit to those who imported the goods before the TCO came into effect, allowing them to reclaim the duties paid.