EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703853
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.
Caledus Australia Pty Ltd applied for a TCO in respect of certain drill hole casing and/or tubing centralisers on 03 July 2007.
Instrument
TCO No 0703853 was made on 21 September 2007. It declares that those certain drill hole casing and/or tubing centralisers 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. 0703853 is taken to have come into force on 03 July 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 Parliament of Australia, provides a framework for the regulation of customs and excise duties. Specifically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can lower the customs duty rate on certain goods. This mechanism was introduced to address the need for tariff relief for specific goods where no suitable Australian-made alternatives exist, thereby encouraging trade and potentially benefiting the economy by making certain goods more competitively priced. Tariff Concession Instrument No. 0703853, made on 21 September 2007, is an example of this process. It was made following an application by Caledus Australia Pty Ltd for certain drill hole casing and/or tubing centralisers, where the CEO determined that no substitutable goods were produced in Australia, satisfying the core criteria under section 269C of the Act. The order, which came into effect on 03 July 2007, sets the duty rate for these goods at free, down from the general rate of 5%, aiming to align with the policy objective of providing tariff relief where appropriate.
Scope and Application
The Tariff Concession Order (TCO) No 0703853 applies to the goods specified in the application by Caledus Australia Pty Ltd, which are certain drill hole casing and/or tubing centralisers. The order is made under the Customs Act 1901, which provides the legislative framework for granting tariff concessions for certain goods. The application for a TCO is subject to the core criteria set out in the Act, including the requirement that no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this legislation is national, as it applies throughout Australia and is governed by Commonwealth law. The TCO does not impose any liabilities or disadvantage any person except the Commonwealth and may be subject to further conditions or exemptions as provided in subordinate instruments or the Customs Tariff Act 1995. The order came into effect on the date the application was lodged, which is 03 July 2007, and the CEO is required to publish a notice of the application in the Gazette to allow for any submissions from interested parties.
Key Provisions
The Customs Act 1901 (the Act) is the primary legislative instrument that governs the scheme of Tariff Concession Orders (TCOs). Section 269F (1) of the Act allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO is satisfied that the application is valid and not in relation to goods specified in section 269SJ of the Act, the CEO must then decide whether the application meets the core criteria outlined in section 269C of the Act. Specifically, for the application to meet the core criteria, there must be no substitutable goods produced in Australia in the ordinary course of business on the day the application was lodged. The definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively.
The obligations imposed by the Act on the parties involved are primarily on the CEO. Once an application is received, the CEO must publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1) of the Act). In the case of TCO No. 0703853, the CEO did not receive any submissions in response to the Gazette notice. The CEO must also ensure that the TCO does not affect the rights of a person (other than the Commonwealth) to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration. The rights of importers are beneficially affected as 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).
Under the Act, breaches or non-compliance with the requirements of a TCO can lead to various civil or criminal consequences. However, the Act does not specify particular offences or penalties for breaches related to TCOs. Instead, penalties would typically be determined by the specific provisions of the Customs Act 1901 or any other relevant legislation. In general, penalties for breaches of customs regulations can include fines and, in serious cases, imprisonment. The maximum penalties would depend on the nature and severity of the breach, as outlined in the relevant sections of the Customs Act 1901. For example, under section 237 of the Act, penalties for false statements or other fraudulent conduct in relation to customs matters can result in fines of up to 10,000 penalty units or imprisonment for up to five years, or both.