EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708315
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.
IHI Engineering Australia Pty Ltd applied for a TCO in respect of certain electrical cable power station ladders on 01 June 2007.
Instrument
TCO No 0708315 was made on 17 August 2007. It declares that those certain electrical cable power station ladders 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. 0708315 is taken to have come into force on 01 June 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, enacted by the Australian Parliament, provides a framework for the application of customs duties and the administration of border controls. This Act includes provisions for Tariff Concession Orders (TCOs) which were introduced to address the issue of granting tariff concessions on specific goods. The policy objective of TCOs is to facilitate the import of goods that are not produced domestically or are not readily available in Australia by applying a reduced or free rate of customs duty. The explanatory statement outlines Tariff Concession Instrument No. 0708315, which was made on 17 August 2007. This instrument was issued in response to an application by IHI Engineering Australia Pty Ltd for a TCO on certain electrical cable power station ladders. The instrument declares these goods to be subject to a tariff rate specified in Schedule 4 to the Customs Tariff Act 1995, with the general rate of duty reduced to free. This change benefits importers by potentially allowing them to apply for a refund of duties paid on these goods since the effective date of the TCO, which is 1 June 2007.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework for Tariff Concession Orders (TCOs) that the Chief Executive Officer of Customs can implement to provide lower rates of customs duty on certain goods. This applies to any person who makes an application under section 269F of the Act, provided that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must ensure that the application meets the core criteria outlined in section 269C, specifically that no substitutable goods are produced in Australia at the time the application is lodged. This determination is made using definitions set out in sections 269D, 269E, and 269F, which define 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods', respectively. If the application meets these criteria, a TCO is issued under section 269P(3), applying a prescribed tariff item from Schedule 4 of the Customs Tariff Act 1995. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, although in this case, no submissions were received. The TCO takes effect from the date the application was lodged, as per subsection 269S(1) of the Act, and it does not disadvantage any person or impose liabilities in relation to actions taken before the TCO's registration.
Key Provisions
The Tariff Concession Instrument No. 0708315 under the Customs Act 1901 primarily focuses on the issuance of a Tariff Concession Order (TCO) for specific goods. Section 269F of the Act allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning particular goods (269F). If the application is deemed valid, meaning it does not involve goods that are ineligible under section 269SJ, the CEO must evaluate whether the application meets the core criteria outlined in section 269C. According to section 269C, an application meets the core criteria if, on the date it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Substitutable goods are defined under section 269D as goods produced in Australia that can serve the same use, including design purposes, as the goods in question.
The obligations imposed by the Act on parties or entities it governs include ensuring that the TCO application is complete and meets all the core criteria as defined by sections 269B, 269C, 269D, and 269E. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties if they believe the TCO should not proceed, as per subsection 269K(1) of the Act. In this specific case, IHI Engineering Australia Pty Ltd applied for a TCO on 01 June 2007, and the CEO issued TCO No. 0708315 on 17 August 2007, declaring that the electrical cable power station ladders are subject to a 0% duty rate, as no substitutable goods were being produced in Australia.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations may result in civil or criminal penalties. While the explanatory statement does not detail specific offences or penalties, breaches of customs laws generally can lead to substantial fines and, in severe cases, imprisonment. The penalties vary based on the severity and intent of the breach but can include fines up to several thousand Australian dollars and imprisonment for more significant violations. The Act does not specify maximum penalties in this context, but it is clear that non-compliance can have serious legal repercussions.