EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705201
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.
Frank Gasser Family Trust applied for a TCO in respect of certain prefabricated buildings on 05 April 2007.
Instrument
TCO No 0705201 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. 0705201 is taken to have come into force on 05 April 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, as amended, provides for the implementation of Tariff Concession Orders (TCOs) which offer reduced rates of customs duty on specified goods. The Tariff Concession Instrument No. 0705201 was introduced to facilitate tariff concessions for certain prefabricated buildings, addressing the need for lower duty rates to support their importation. This instrument was enacted by the Australian Government and is designed to ensure that such concessions are granted where no substitutable goods are produced in Australia, thereby supporting the import of these goods and benefiting importers who can apply for refunds of duties paid prior to the effective date of the concession. The Tariff Concession Instrument was brought into effect on 23 July 2007, the same date the application for the concession was lodged, ensuring a seamless transition for affected parties.
Scope and Application
The Customs Act 1901, as detailed in Tariff Concession Instrument No. 0705201, outlines the procedures for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to individuals and entities seeking tariff concessions for specific goods, provided these goods are not listed in section 269SJ of the Act, which excludes certain items from eligibility. The Act ensures that a TCO will only be granted if no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269D and 269E of the Act. The application process involves submitting a request to the CEO, who must then determine if the application meets the core criteria, including the absence of substitutable goods produced domestically. Once satisfied, the CEO issues a written TCO, effectively reducing or eliminating customs duties on the specified goods. This legislation extends across the Commonwealth of Australia and is subject to the provisions of the Customs Tariff Act 1995. The instrument in question, TCO No. 0705201, pertains to certain prefabricated buildings and was made effective from the date of the application, 05 April 2007, without retroactive disadvantage to any party except the Commonwealth.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0705201 under the Customs Act 1901 include sections 269C, 269F, 269K, 269P, and 269S. Section 269F allows for the application of Tariff Concession Orders (TCO) to goods, provided they do not fall under the exclusions specified in section 269SJ. Section 269C sets out the core criteria for an application to be approved, namely that no substitutable goods were produced in Australia on the day the application was lodged. If the Chief Executive Officer (CEO) of Customs is satisfied that an application meets these criteria, they must make a TCO under section 269P, which specifies the prescribed duty rate for the goods. Section 269K mandates that the CEO publish a notice in the Gazette inviting submissions on the application, while section 269S provides that a TCO is effective from the day the application was lodged.
The Act imposes several obligations on parties and entities it governs. For example, any person wishing to apply for a TCO must ensure that their application is not in respect of goods specified in section 269SJ. Additionally, the CEO must assess whether an application meets the core criteria stipulated in section 269C. Upon meeting these criteria, the CEO must make a written TCO and publish a notice in the Gazette inviting submissions, as per section 269K. The CEO is also required to ensure that the TCO does not adversely affect any person's rights as at the date of registration and does not impose any liabilities on any person, as per section 269S(1).
Under the Customs Act 1901, breaches of the provisions related to TCOs can result in both civil and criminal consequences. While specific offences, penalties, or consequences for breach are not detailed in the explanatory statement, the Act generally provides for a range of penalties for non-compliance with customs regulations. For example, section 267 of the Act outlines penalties for providing false or misleading information in relation to customs matters, which can include fines of up to $22,200 for individuals and up to $111,000 for corporations, depending on the severity of the offence. Additionally, section 268 imposes penalties for knowingly importing or exporting dutiable goods without paying the appropriate duty, which can result in fines up to $111,000 for individuals and $555,000 for corporations, along with potential imprisonment terms.