EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705862
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.
AGR Asia Pacific Pty Ltd applied for a TCO in respect of certain anchors and/or anchor parts on 23 April 2007.
Instrument
TCO No 0705862 was made on 06 July 2007. It declares that those certain anchors and/or anchor 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. 0705862 is taken to have come into force on 23 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 Tariff Concession Instrument No. 0705862, enacted in 2007 under the Customs Act 1901, addresses the issue of applying lower rates of customs duty to specific goods that are not substitutable by Australian-made alternatives. This legislative instrument was introduced to facilitate more affordable access to certain imports by removing or reducing the financial burden of customs duties on these goods. The Customs Act 1901, enacted by the Australian Parliament, provides the framework for tariff concessions through Tariff Concession Orders (TCOs), which the Chief Executive Officer of Customs can issue upon meeting specified criteria. The policy objective is to ensure that when no suitable Australian-made substitutes exist, importers can benefit from reduced duty rates, thus enhancing competitiveness and potentially lowering costs for consumers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce the customs duty on certain goods. This legislative mechanism applies to any individual or entity that applies for such an order in relation to goods not specified in section 269SJ of the Act, which includes goods that are restricted from tariff concessions. The application of a TCO is contingent on the absence of substitutable goods being produced in Australia at the time of application, as defined by sections 269C, 269D, and 269E of the Act. Once a TCO is made, it operates from the date the application was lodged, as per section 269S(1) of the Act. Notably, the TCO does not affect the rights of any person adversely, including the Commonwealth, concerning actions taken before the TCO’s effective date, and it imposes no liabilities on anyone. Instead, it allows for the refund of duties paid on the specified goods since the TCO's effective date, benefiting importers of those goods.
Key Provisions
The main operative sections of this legislation (F2007L02489) relate to the granting of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901. Section 269C outlines the core criteria that must be met for a TCO application to be considered, primarily that no substitutable goods were produced in Australia on the day the application was lodged (s 269C). Section 269P(3) mandates that if these criteria are met, the Chief Executive Officer of Customs (CEO) must issue a written TCO order specifying that the goods in question are subject to a prescribed tariff item from Schedule 4 of the Customs Tariff Act 1995 (s 269P(3)). TCO No. 0705862, issued on 6 July 2007, exemplifies this process by declaring that certain anchors and/or anchor parts are subject to a zero duty rate under item 50 of Schedule 4, based on the CEO's satisfaction that no substitutable goods were produced in Australia.
The Act imposes several obligations on the parties involved. The CEO must ensure that any TCO application that does not pertain to goods specified in section 269SJ is assessed against the core criteria. Once satisfied that the application meets these criteria, the CEO is required to make a written TCO order (s 269P(3)). The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested party to submit objections (s 269K(1)). Importers, as beneficiaries of the TCO, have the right to apply for a refund of duties paid on goods imported since the TCO is deemed to have come into force (Reg 126(1)(r)).
In terms of consequences for breach, the Act does not explicitly outline specific offences, penalties, or consequences for non-compliance with the TCO provisions. However, general provisions of the Customs Act 1901 and associated regulations likely apply, which could include fines, penalties for non-compliance, or other administrative actions. For instance, incorrect declarations or fraudulent claims for tariff concessions could result in civil or criminal penalties as outlined in other sections of the Customs Act and the Crimes Act 1914. The specific penalties would depend on the nature and severity of the breach, with potential fines and imprisonment for more serious offences.