EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705863
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 submerged turret buoy mooring cables on 23 April 2007.
Instrument
TCO No 0705863 was made on 06 July 2007. It declares that those certain submerged turret buoy mooring cables 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. 0705863 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. 0705863 was enacted under the Customs Act 1901 to provide tariff concessions on specific goods, thereby addressing the gap in customs duty rates for goods not produced in Australia. This instrument was introduced to facilitate the importation of certain submerged turret buoy mooring cables by AGR Asia Pacific Pty Ltd, offering a more favourable duty rate compared to the general tariff. The instrument was made by the Chief Executive Officer of Customs, who found that no substitutable goods were produced in Australia, thereby meeting the core criteria specified in section 269C of the Act. This concession was intended to benefit importers by allowing them to apply for a refund of duty on these goods from the date the instrument came into force, which was 23 April 2007, as per the provisions of the Customs Act and Customs Tariff Act 1995. The policy objective is to provide an incentive for the importation of goods that are not domestically produced, thus supporting trade and economic activities.
Scope and Application
The Tariff Concession Instrument No. 0705863 under the Customs Act 1901 applies to specific submerged turret buoy mooring cables, providing a tariff concession that lowers the customs duty from 5% to free. This concession applies to the goods identified in the instrument, which was made following an application by AGR Asia Pacific Pty Ltd on 23 April 2007. The scope of the Act involves the Chief Executive Officer of Customs who must assess applications for Tariff Concession Orders against core criteria, ensuring that no substitutable goods are produced in Australia. The instrument extends to the entire Commonwealth of Australia and operates under the authority granted by section 269F of the Customs Act 1901. The Act does not specify exclusions or exemptions, except for goods listed in section 269SJ, which are ineligible for TCOs. The application of the Act may be further defined or extended through subordinate instruments, although the primary scope remains focused on the specified submerged turret buoy mooring cables.
Key Provisions
The main operative sections of this legislation, particularly section 269C of the Customs Act 1901, establish the criteria for the approval of a Tariff Concession Order (TCO). Specifically, Section 269C requires that, for a TCO to be granted, it must be the case that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. This is a crucial provision as it underpins the decision-making process for the Chief Executive Officer of Customs (CEO) when considering whether to approve an application for a TCO. Furthermore, Section 269P(3) mandates that if the CEO is satisfied that the application meets these core criteria, they must make a written order declaring the goods to which the TCO applies, as detailed in Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties or entities it governs are primarily centred around the application and approval process for TCOs. The CEO is obligated to thoroughly assess applications to ensure they meet the specified criteria, including the absence of substitutable goods produced in Australia. The applicant, in this case AGR Asia Pacific Pty Ltd, must provide sufficient evidence to support their application, demonstrating that no substitutable goods are produced domestically. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties, although this step does not appear to have been contested in this instance as no submissions were received.
The legislation outlines specific offences, penalties, and consequences for breaches related to the misuse or improper application of TCOs. While the explanatory statement does not detail specific penalties, breaches of the Customs Act 1901 generally attract significant penalties under Australian law. These can include substantial fines and, in severe cases, criminal charges. For instance, fraudulent applications or misrepresentation of facts could lead to penalties that reflect the seriousness of the offence, potentially resulting in imprisonment, fines, or both, depending on the nature and extent of the breach. The overarching aim is to ensure compliance and maintain the integrity of the tariff concession scheme.
In summary, the Customs Act 1901, through its key sections and the associated Tariff Concession Instrument No. 0705863, establishes a structured process for the approval of TCOs, ensuring that such concessions are granted only when justified by the absence of domestic production of substitutable goods. The obligations on the CEO and applicants are clear and must be adhered to rigorously, with significant consequences for non-compliance, thereby maintaining the fairness and effectiveness of the tariff system.