EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715781
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.
Multiform Industries Pty Ltd applied for a TCO in respect of certain stone cutting line on 30 November 2007.
Instrument
TCO No 0715781 was made on 19 September 2007. It declares that those certain stone cutting lines 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. 0715781 is taken to have come into force on 19 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 Australian Parliament, provides for the creation of Tariff Concession Orders (TCOs) to facilitate the importation of goods under preferential tariff rates. The Act establishes a framework under which the Chief Executive Officer of Customs can make TCOs, which apply reduced customs duties on certain goods, provided that no substitutable goods are produced in Australia. This mechanism aims to support industries by lowering the cost of importing necessary goods, thereby encouraging trade and economic activity. Instrument TCO No. 0715781, issued under this legislative framework, exemplifies the application of these provisions to specific stone cutting lines, granting them a tariff concession that effectively makes the duty on these goods free, down from the general rate of 5%. This particular TCO was made after Multiform Industries Pty Ltd applied for the concession, and it came into force on the date of the application, 19 September 2007, without any adverse submissions being received during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 0715781, established under Part XVA of the Customs Act 1901, applies to individuals or entities seeking a tariff concession on certain stone cutting lines. This instrument is particularly relevant for those involved in the importation of these goods, as it allows for a lower rate of customs duty to be applied. The instrument's application is contingent on the Chief Executive Officer of Customs determining that no substitutable goods are produced in Australia in the ordinary course of business, as outlined in section 269C of the Act. The geographic scope of this legislation is nationwide, as it is part of the Commonwealth’s customs framework. There are exclusions stipulated in section 269SJ of the Act, which specifies goods that cannot be subject to a tariff concession order. The instrument came into effect on 19 September 2007, the same day the application was lodged, and it does not retroactively affect the rights or liabilities of any person other than the Commonwealth. Importers may benefit from this order by applying for a refund of duty on goods imported since the effective date of the concession.
Key Provisions
The main operative sections of the Customs Act 1901 (section 269C, 269P(3), and 269K(1)) establish the conditions under which Tariff Concession Orders (TCOs) can be applied for and granted. Under section 269C, an application for a TCO will be considered if no substitutable goods were produced in Australia on the day the application was lodged. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must issue a written TCO order, as outlined in section 269P(3). Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the proposed TCO if they believe it should not be granted.
The Act imposes several obligations on the parties involved in the process of applying for and granting TCOs. The CEO must ensure that the application does not pertain to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. Furthermore, the CEO is obligated to publish a notice in the Gazette inviting objections to the proposed TCO, as required by section 269K(1). Applicants, on the other hand, must provide sufficient evidence to the CEO to demonstrate that the goods in question meet the core criteria for a TCO, as defined by sections 269C and 269D.
Breaching the provisions of the Customs Act 1901 or any associated regulations can result in significant legal consequences. For example, making a false or misleading statement in an application for a TCO could be considered an offence under section 228 of the Act, which carries a maximum penalty of 2,000 penalty units for individuals and 10,000 penalty units for corporations. Additionally, failure to comply with the conditions of a granted TCO, such as importing goods not covered by the concession, could result in the imposition of additional customs duties and potential legal action by the CEO.
Overall, the Act and associated regulations are designed to ensure that tariff concessions are granted fairly and only when the criteria are met. The obligations and consequences outlined in the Act help to maintain the integrity of the tariff concession scheme and protect the interests of all parties involved. The CEO’s role in overseeing the application and granting of TCOs is critical in ensuring that the scheme operates efficiently and effectively, while also providing an avenue for interested parties to voice any objections or concerns.