EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704052
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.
Ing Real Estate Development Australia Pty Limited applied for a TCO in respect of certain observation wheel parts on 15 March 2007.
Instrument
TCO No 0704052 was made on 01 June 2007. It declares that those certain observation wheel parts 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. 0704052 is taken to have come into force on 15 March 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 to provide a comprehensive legal framework for the administration of customs duties and regulations in Australia. This Act, introduced by the Australian Parliament, aims to streamline the process of applying for tariff concessions, ensuring that businesses and importers can effectively manage their customs obligations. A notable gap addressed by the Act is the need for a clear and efficient mechanism for reducing customs duties on specific goods, which was not previously adequately covered. This legislative framework allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that can reduce the customs duty on certain goods, provided they meet the criteria outlined in the Act. The policy objective behind this is to support Australian businesses by reducing the cost of imported goods, thereby enhancing competitiveness and facilitating smoother trade practices. The Explanatory Statement for Tariff Concession Instrument No. 0704052 clarifies the application process and the criteria for TCOs, ensuring transparency and accountability in the administration of customs duties.
Scope and Application
The Tariff Concession Instrument No. 0704052, under the Customs Act 1901, applies to individuals or entities that seek tariff concessions for specific goods by applying to the Chief Executive Officer of Customs. This legislation is designed to benefit importers by providing them with a lower rate of customs duty on goods that are subject to a Tariff Concession Order (TCO). The application of this Act is nationwide, reflecting its federal jurisdiction under the Commonwealth of Australia. The instrument was created to facilitate the reduction of customs duty for certain observation wheel parts, following an application by Ing Real Estate Development Australia Pty Limited on 15 March 2007. The TCO, effective from the same date, specifies that the goods in question are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, granting them a zero duty rate. Notably, the Act does not disadvantage any person or impose liabilities on them in relation to actions taken before the TCO's effective date. Any person who considers that a TCO should not be made has the opportunity to submit a response to the CEO after the publication of the application in the Gazette, although no submissions were received for this particular instrument.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0704052 under the Customs Act 1901 include sections 269C, 269P, and 269SJ. Section 269C establishes that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia 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 the core criteria, they must issue a written order declaring the goods to which the order applies. Section 269SJ outlines the types of goods that cannot be subject to a TCO. The instrument specifies that certain observation wheel parts, which are subject to a TCO, are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, with the rate of duty being free, as opposed to the general rate of 5%.
The Act imposes specific obligations and requirements on parties or entities it governs. Firstly, any person who wishes to apply for a TCO must ensure their application adheres to the criteria outlined in section 269C, confirming that no substitutable goods were produced in Australia on the application date. The CEO of Customs, upon receiving a valid application, must publish a notice in the Gazette inviting submissions from any interested parties. They are also required to consider any submissions received and decide whether to issue a TCO based on the core criteria. Additionally, the CEO must ensure that the TCO does not adversely affect the rights of any person, other than the Commonwealth, as at the date of registration. Importers of the goods subject to a TCO will be entitled to apply for a refund of duty on goods imported since the TCO is taken to have come into force.
Failure to comply with the provisions of the Customs Act 1901 or the terms of a TCO may result in various consequences. While the explanatory statement does not detail specific offences under the Act, breaches of customs regulations generally may result in civil or criminal penalties. For instance, knowingly making a false statement in an application for a TCO or any other customs matter could lead to criminal charges and penalties, including fines and imprisonment. The specific penalties would depend on the nature and severity of the breach, but they could include significant fines and/or imprisonment for serious offences. Additionally, any person found to be in breach of the terms of a TCO could face civil penalties, including the repayment of any duty benefits obtained through the TCO, plus interest and additional financial penalties.