EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704854
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.
Habode (Australia) Pty Limited applied for a TCO in respect of certain prefabricated buildings on 30 March 2007.
Instrument
TCO No 0704854 was made on 23 July 2007. It declares that those certain prefabricated buildings 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. 0704854 is taken to have come into force on 30 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 by the Commonwealth Parliament to regulate customs duties and related matters. One significant aspect of the Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which aim to reduce the rate of customs duty on certain goods, fostering trade and economic benefits. The Tariff Concession Instrument No. 0704854, enacted in 2007, is an example of this provision in action. In this instance, Habode (Australia) Pty Limited applied for a TCO for certain prefabricated buildings, and the Chief Executive Officer of Customs (CEO) was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria. Consequently, the CEO made the TCO, declaring that the specified prefabricated buildings would be subject to a zero rate of duty, down from the general rate of 5%, effective from the date the application was lodged. The policy objective behind this measure is to support the importation of these goods by reducing their duty, thereby potentially lowering costs for importers and encouraging trade.
Scope and Application
The Tariff Concession Instrument No. 0704854, issued under the Customs Act 1901, applies to goods for which a Tariff Concession Order (TCO) is sought, specifically certain prefabricated buildings in this case. This legislation is pertinent to individuals or entities seeking tariff concessions on imports, thereby reducing the customs duty applied to these goods. The application of the Act is Commonwealth-wide, as it falls under federal customs legislation. However, the application and subsequent concession are specifically tailored to goods that are not substitutable by Australian-produced alternatives, as outlined in the Act. The instrument extends its application by providing a mechanism for the CEO of Customs to grant tariff concessions, contingent upon the criteria being met, and does not impose any liabilities on persons other than the Commonwealth. It is worth noting that the Act does not specify exclusions or thresholds within this particular TCO, but general exclusions apply as per section 269SJ, which lists goods that cannot be subject to a TCO. The scope of the Act can be further defined or extended through subordinate instruments, which may include regulations or further orders under the Customs Act.
Key Provisions
The main operative sections of the Customs Act 1901, as applied in this instrument, include section 269F, which allows for applications to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. Additionally, section 269P(3) requires the CEO to make a written order, a TCO, if satisfied that the application meets the core criteria, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
This legislation imposes specific obligations on the CEO of Customs. Under section 269K(1), the CEO must publish a notice in the Gazette inviting any person to lodge a submission if they believe there are reasons why a TCO should not be made. Moreover, the CEO must decide whether an application meets the core criteria as outlined in section 269C. If the CEO determines that the application meets these criteria, they are mandated to issue a TCO as per section 269P(3). Additionally, the CEO must ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person before the date of registration, in accordance with subsection 269S(1).
Failure to comply with the provisions of the Customs Act 1901 and the accompanying regulations may lead to various consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs regulations generally may result in civil or criminal penalties. For example, knowingly making a false statement or representation under the Customs Act can lead to criminal charges, with potential penalties including substantial fines and imprisonment. Additionally, there may be administrative penalties for non-compliance with procedural requirements, such as failing to apply for a TCO in the prescribed manner. The exact penalties depend on the nature and severity of the breach, as outlined in the relevant sections of the Customs Act and the Customs Regulations 1995.