EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715088
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.
Sydney Slipways Pty Limited applied for a TCO in respect of certain boat transporter on 17 September 2007.
Instrument
TCO No 0715088 was made on 23 November 2007. It declares that those certain boat transporters 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. 0715088 is taken to have come into force on 17 September 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, establishes a framework for the regulation of customs duties and the facilitation of international trade. Specifically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can lower the customs duty on specified goods. This legislative mechanism was introduced to address the need for flexibility in applying customs duties, particularly in cases where substitutable goods are not produced in Australia. The primary policy objective of the TCOs is to support Australian industries by reducing the duty on imported goods where there is no local production, thereby potentially lowering costs and improving competitiveness. In the case of TCO No. 0715088, the Act facilitated a concession for certain boat transporters, effectively setting their duty rate to free, provided that no substitutable goods were produced in Australia. This measure was introduced following an application by Sydney Slipways Pty Limited and came into effect on 17 September 2007, without any adverse submissions during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 0715088, under the Customs Act 1901, applies specifically to certain boat transporters as identified in the instrument. The Act provides a framework through which the Chief Executive Officer (CEO) of Customs can grant tariff concessions to goods that meet specific criteria, in this case, those that are not substitutable by goods produced in Australia. This instrument was issued following an application by Sydney Slipways Pty Limited and came into force on 17 September 2007, the date the application was lodged. The instrument exempts these particular boat transporters from the general customs duty rate of 5%, instead applying a duty-free rate as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on persons other than the Commonwealth, meaning that any importers of these goods will be able to apply for a refund of duty paid on imports since the date of the instrument's commencement.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0715088, under the Customs Act 1901, primarily focus on the process of establishing a Tariff Concession Order (TCO). Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. If the CEO determines that the application is valid and does not pertain to goods specified in section 269SJ, which are ineligible for a TCO, the CEO must then assess whether the application meets the core criteria set out in section 269C. If satisfied, the CEO is required to issue a written TCO, as per section 269P(3).
The obligations imposed by the Act on the parties involved primarily rest with the CEO of Customs. The CEO is required to decide whether an application for a TCO meets the core criteria, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties once a TCO application is accepted as valid, as mandated by subsection 269K(1).
In terms of consequences for breach, the Act does not explicitly outline offences or penalties for failing to comply with the requirements of a TCO. However, the act of applying for a TCO in respect of goods specified in section 269SJ, which are ineligible, could potentially be viewed as non-compliance with the Act's provisions. Given the nature of the TCO as a concessional measure, any significant breach might be addressed under the broader customs regulations, potentially leading to civil or criminal consequences. The specific penalties would depend on the nature and severity of the breach, but they could include fines and other sanctions as stipulated in the relevant customs laws.