EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712182
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.
Valbruna Australia Pty Ltd applied for a TCO in respect of certain bars and/or rods on 30 July 2007.
Instrument
TCO No 0712182 was made on 12 October 2007. It declares that those certain bars and/or rods 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 0%.
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. 0712182 is taken to have come into force on 30 July 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 Parliament of Australia, provides a legislative framework for the regulation of customs duties, including the ability to grant tariff concessions for certain goods. The Act, particularly Part XVA, allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to reduce customs duties on specific goods if certain criteria are met, thereby addressing the gap in facilitating trade and economic benefits for Australian businesses and consumers. The Tariff Concession Instrument No. 0712182, made on 12 October 2007, exemplifies the application of this scheme by granting a zero percent duty rate on certain bars and/or rods, as no substitutable goods were produced in Australia, aligning with the policy objective of enhancing trade competitiveness and economic efficiency.
Scope and Application
The Tariff Concession Instrument No. 0712182 under the Customs Act 1901 applies to specific bars and/or rods for which Valbruna Australia Pty Ltd applied on 30 July 2007. The instrument was issued by the Chief Executive Officer of Customs (CEO) after determining that no substitutable goods were produced in Australia at the time of application, thereby meeting the core criteria outlined in the Act. This concession results in a reduction of the customs duty rate from the general 5% to 0% for these particular goods. The application of the TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on individuals other than the Commonwealth, ensuring that it does not disadvantage anyone or create new obligations for actions taken before the TCO's effective date.
The geographic reach of this Act is national, with the concessions applying across all jurisdictions within Australia. However, the Act also interacts with the Customs Tariff Act 1995, particularly Schedule 4, which details the tariff rates. Any further application or restrictions on the use of the TCO may be defined through subordinate instruments issued under the authority of the Customs Act 1901. The CEO must consult with relevant parties by publishing a notice in the Gazette, although in this case, no submissions were received. The TCO came into force on the date the application was lodged, 30 July 2007, and allows for the refund of duties on goods imported since that date for those who meet the criteria.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0712182 under the Customs Act 1901 (section 269F) allow for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) regarding certain goods, in this case, specific bars and/or rods. If the CEO determines that the application meets the core criteria, which includes ensuring that no substitutable goods were produced in Australia at the time of application (section 269C), the CEO is mandated to issue a written order declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995. In this instance, the TCO reduces the duty rate on these goods from 5% to 0% (section 269P(3)).
The Act imposes specific obligations on both the applicant and the CEO. The applicant must ensure that the goods in question meet the eligibility criteria, including the absence of substitutable goods produced in Australia. Upon receiving a valid application, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit objections or reasons why the TCO should not be granted (subsection 269K(1)). In this case, no objections were received, leading to the issuance of TCO No. 0712182 on 12 October 2007. The CEO’s role is critical in verifying the application against the stipulated criteria and, if satisfied, issuing the TCO.
Failure to comply with the provisions of the Customs Act 1901 or the regulations set forth therein could result in various civil or criminal consequences. Although the explanatory statement does not detail specific penalties for breaches related to TCOs, general penalties under the Customs Act may include fines and imprisonment. For instance, under section 226 of the Act, contravening the Act may result in fines of up to $22,200 for individuals and $111,000 for bodies corporate, alongside or in lieu of imprisonment. The severity of penalties depends on the nature and extent of the breach.
Under this TCO, while it provides tariff concessions, it does not impose any liabilities on any person and does not affect the rights of any person as at the date of registration (subsection 269S(1)). Importers of the specified goods can benefit from this concession by applying for a refund of duty on goods imported since the TCO is taken to have come into force on 30 July 2007 (paragraph 126(1)(r) of the Regulations). This ensures that the rights of the importers are not adversely affected, and they can take advantage of the reduced duty rate as provided by the TCO.