EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713255
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.
Caledus Australia Pty Ltd applied for a TCO in respect of certain casing reaming shoes on 22 August 2007.
Instrument
TCO No 0713255 was made on 02 November 2007. It declares that those certain casing reaming shoes 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. 0713255 is taken to have come into force on 22 August 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. 0713255, enacted in 2007, addresses a specific gap in the Customs Act 1901 by providing tariff concessions for certain goods not produced in Australia. The Customs Act 1901 allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to lower customs duty rates on goods not manufactured domestically. The instrument was introduced by the relevant legislature to facilitate trade by reducing the cost of importing certain goods. The instrument declares that specific casing reaming shoes are subject to free duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, effective from the date of the application on 22 August 2007, thereby benefiting importers by allowing them to apply for a refund of duty paid on these goods since that date. This legislative action aims to streamline the importation process and support trade without imposing any new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0713255, made under the Customs Act 1901, applies to specific goods – in this instance, certain casing reaming shoes – that are the subject of a Tariff Concession Order (TCO). The Act enables the Chief Executive Officer of Customs to grant tariff concessions to eligible goods upon application, provided they meet certain core criteria such as the absence of substitutable goods being produced in Australia in the ordinary course of business. The instrument specifically designates these casing reaming shoes as goods to which a reduced rate of customs duty applies, with the general rate being 5% and the concessional rate being free. The application of this TCO is governed by Commonwealth law and impacts importers who may benefit from the tariff concession, potentially allowing them to apply for refunds of duty paid on these goods since the effective date of the TCO, which is the date the application was lodged. Importantly, the TCO does not affect any existing rights or impose liabilities on any person, except for the Commonwealth, for actions taken before the date of the order.
Key Provisions
The Customs Act 1901, under its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) which allow for lower rates of customs duty on specified goods (s 269F). To initiate this process, an application must be made to the Chief Executive Officer of Customs (the CEO) (s 269F). If the CEO is satisfied that the application is not for goods specified in section 269SJ of the Act, they must determine whether the application meets the core criteria (s 269C). These criteria include the condition that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). If the CEO determines that these criteria are met, they must make a written order declaring that the goods in question are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995 (s 269P(3)).
The obligations imposed by the Customs Act on entities and individuals under this legislative framework include the requirement for the CEO to publish a notice in the Gazette inviting submissions from any person who believes that the TCO should not be made (s 269K(1)). Additionally, once a TCO is made, the CEO must ensure that the rights of importers are beneficially affected. Specifically, importers of the goods in question can apply for a refund of duty on goods imported since the date the TCO is taken to have come into force (s 126(1)(r) of the Regulations). Moreover, the Act ensures that the TCO does not disadvantage any person (other than the Commonwealth) by imposing liabilities in respect of actions taken before the TCO's effective date (s 269S(1)).
In terms of consequences for breaches, the Customs Act does not explicitly outline offences, penalties, or specific civil or criminal consequences within the text provided. However, general provisions of the Act and related regulations would apply to any breaches of the conditions under which the TCO is made. The maximum penalties for contraventions of the Customs Act can include substantial fines and, in some cases, imprisonment, depending on the severity and intent of the breach. These penalties are determined in accordance with the broader framework of the Customs Act and associated legislative instruments.