EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705864
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 anchor chains on 23 April 2007.
Instrument
TCO No 0705864 was made on 06 July 2007. It declares that those certain anchor chains 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. 0705864 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 Customs Act 1901 was enacted by the Australian Parliament and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. This mechanism allows the Chief Executive Officer of Customs to grant tariff concessions on certain goods, thereby reducing customs duty for those specified items. The problem this legislation addresses is the facilitation of trade by lowering the cost of importing specific goods that are not produced domestically or have no suitable domestic substitutes, thus encouraging economic efficiency and competitive pricing. Instrument No. 0705864, made on 6 July 2007, is an example of such a concession applied to certain anchor chains, reducing their duty from the general rate of 5% to free, effective from the date the application was lodged, 23 April 2007. The policy objective is to ensure that the tariff concessions do not disadvantage any person or impose liabilities on them for actions taken prior to the concession's registration.
Scope and Application
The Tariff Concession Instrument No. 0705864 under the Customs Act 1901 applies to any person or entity seeking to import specified goods, in this case, certain anchor chains, into Australia. The Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower the rate of customs duty on particular goods if certain criteria are met. Specifically, a TCO can be granted if no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. In this instance, the CEO was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria for the concession. The application of the TCO is national in scope, affecting all importers of the specified goods within Australia. The TCO does not apply to goods listed in section 269SJ of the Act, which are those that cannot be subject to a TCO. Additionally, the TCO does not disadvantage any person or impose any liabilities on persons other than the Commonwealth for actions taken before the TCO's effective date. The TCO's application may be further defined or restricted through subordinate instruments, though no such extensions or restrictions are noted in this specific TCO.
Key Provisions
The Tariff Concession Instrument No. 0705864, established under section 269F of the Customs Act 1901 (the Act), pertains to the process of applying for and issuing Tariff Concession Orders (TCOs) concerning specific goods. A TCO application can be made by any person to the Chief Executive Officer of Customs (the CEO) if the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for a TCO (section 269F). The CEO must determine if the application meets the core criteria outlined in section 269C of the Act, which requires that, on the application date, no substitutable goods were produced in Australia in the ordinary course of business. The definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the CEO is satisfied that the application meets these criteria, a written order (a TCO) must be issued under subsection 269P(3) of the Act. This order declares that the goods specified in the application are subject to a prescribed rate in Schedule 4 to the Customs Tariff Act 1995 (the Tariff).
The Act imposes several obligations on the parties involved in the TCO process. Firstly, the CEO must, as soon as practicable after accepting a TCO application as valid, publish a notice in the Gazette (subsection 269K(1) of the Act). This notice must invite any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. For TCO No. 0705864, no such submissions were received. Additionally, the CEO must ensure that the application meets the core criteria stipulated in section 269C of the Act. The TCO does not affect the rights of any person other than the Commonwealth, ensuring that no individual or entity other than the Commonwealth is disadvantaged or incurs liabilities for actions taken prior to the registration date (subsection 269S(1) of the Act). Furthermore, the TCO does not impose any liabilities on any person.
Under the Customs Act 1901, breaches of the provisions regarding TCOs may result in civil or criminal consequences. However, the explanatory statement does not detail specific offences, penalties, or maximum penalties for non-compliance with the Act in this context. The Act, in general, provides for a range of penalties for breaches, which could include fines or imprisonment, depending on the severity of the breach. The specific penalties would be determined by the courts based on the nature and circumstances of the breach.