EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716853
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.
Caroma Industries Ltd applied for a TCO in respect of certain solids recovery plant on 27 September 2007.
Instrument
TCO No 0716853 was made on 09 January 2008. It declares that those certain solids recovery plant 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. 0716853 is taken to have come into force on 27 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 Commonwealth Parliament, established a framework under which Tariff Concession Orders (TCOs) could be issued to provide tariff concessions on certain imported goods. The Act was designed to address economic and trade policy objectives by reducing the duty on specific goods, thereby promoting trade and supporting industries that rely on imported components. The Tariff Concession Instrument No. 0716853, made under this Act, was introduced in response to an application by Caroma Industries Ltd for tariff concessions on certain solids recovery plant, effective from 27 September 2007. This instrument was made to provide relief by eliminating the duty on these goods, which was generally set at 5%, thereby facilitating the importation of these specific goods without financial burden. The policy objective was to ensure that no substitutable goods were produced in Australia, thereby justifying the tariff concession.
Scope and Application
The Tariff Concession Instrument No. 0716853, made under Part XVA of the Customs Act 1901, applies to any entity that imports goods eligible for a Tariff Concession Order (TCO). Specifically, the Act applies to Caroma Industries Ltd, which sought and received the concession for certain solids recovery plant. The instrument facilitates a lower rate of customs duty for these goods, with the general rate of duty being 5% and the rate for goods subject to the TCO being free. The geographic and jurisdictional reach of this Act is national, governed by the Commonwealth, and it pertains to the importation of specified goods into Australia. The Act excludes goods that are specified in section 269SJ, which cannot be subject to a TCO, and it does not disadvantage any person or impose liabilities on any person in respect of anything done or omitted to be done before the date of registration. The rights of importers will be positively affected, as they can apply for a refund of duty on goods imported since the TCO came into force on 27 September 2007. The Act extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the applicable duty rates.
Key Provisions
The primary operative sections of the Customs Act 1901, specifically under Part XVA, pertain to the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (sections 269C, 269B, 269D, 269E, 269F, 269P, 269SJ, 269K, and 269S). A TCO allows for a reduced rate of customs duty on specified goods. Section 269F allows a person to apply for a TCO concerning particular goods. The CEO must then assess whether the application meets the core criteria, as outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business at the time of the application. If the core criteria are satisfied, the CEO must issue a written order declaring that the specified goods are subject to a prescribed rate under Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on parties and entities include the requirement for applicants to ensure their applications are valid and meet the core criteria specified by the Act. The CEO must process applications promptly, publish notices in the Gazette inviting submissions from interested parties (subsection 269K(1)), and decide whether to issue a TCO based on the information provided and any submissions received. The CEO must also ensure that the TCO does not disadvantage non-Commonwealth persons or impose liabilities on them in respect of actions taken before the TCO's effective date. Additionally, importers must be informed of their rights to apply for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901 and the associated Regulations may result in various civil or criminal consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs laws generally carry significant penalties. For instance, under section 280 of the Customs Act, a person found guilty of an offence may be subject to a fine or imprisonment, or both. The maximum penalties for serious offences can include substantial fines and lengthy prison sentences, depending on the nature and severity of the breach. Additionally, any party that suffers loss or damage due to a breach may be entitled to seek civil remedies, such as compensation, through the courts.