EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719350
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.
Boral Formwork And Scaffolding Pty Limited applied for a TCO in respect of certain wall system components on 13 November 2007.
Instrument
TCO No 0719350 was made on 29 January 2008. It declares that those certain wall system components 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. 0719350 is taken to have come into force on 13 November 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 a framework for the administration of customs and excise duties in Australia. Specifically, Part XVA of the Act outlines the procedures for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The purpose of this legislative framework is to facilitate the application process for tariff concessions on certain goods, ensuring that Australian businesses can access lower rates of customs duty under specified conditions. The policy objective is to provide economic relief to businesses by reducing the cost of imported goods that are not produced domestically, thus supporting competitive markets and encouraging trade. This legislative measure aims to address the gap in tariff relief for specific goods, promoting a more equitable and efficient customs regime.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders allow for a reduced rate of customs duty on certain goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The application for a TCO must meet core criteria as stipulated in the Act, which includes ensuring that the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for TCOs. If the CEO determines that the application meets these criteria, a TCO is issued, declaring the goods subject to a prescribed rate in Schedule 4 of the Customs Tariff Act 1995. This instrument applies to any person or entity seeking tariff concessions for specific goods, as evidenced by the application from Boral Formwork And Scaffolding Pty Limited for wall system components. The geographic reach of the Act is national, as it operates under the Commonwealth jurisdiction, and the application of the TCO is effective from the date of the application. The Act does not disadvantage existing rights or impose liabilities on individuals or entities other than the Commonwealth. The CEO is required to publish a notice in the Gazette inviting submissions regarding the TCO application, although in this instance, no submissions were received.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Order No. 0719350, involve the application and assessment process for tariff concessions under section 269F (1) of the Customs Act 1901. Section 269C sets out the criteria for a tariff concession order, stipulating that no substitutable goods were produced in Australia on the day the application was lodged. This is further defined in sections 269B and 269D, which clarify terms such as 'goods produced in Australia' and'substitutable goods'. If the Chief Executive Officer of Customs (CEO) is satisfied that these criteria are met, they must issue a written order, as per section 269P(3).
The obligations imposed by the Act on parties applying for tariff concessions include ensuring their application is lodged in accordance with the statutory requirements and that the goods specified do not contravene section 269SJ. The CEO is obligated to assess the application against the core criteria and, if satisfied, to make a written tariff concession order. Additionally, the CEO must publish a notice in the Gazette, inviting submissions from any interested parties, as per subsection 269K(1), though no submissions were received in this case.
Breaches of the conditions specified in the Customs Act 1901 and the associated regulations could lead to various consequences. Firstly, there could be civil or criminal penalties for non-compliance with the tariff concession provisions. Under section 217 of the Customs Act, penalties can include fines up to $22,200 for individuals and $111,000 for corporations, depending on the severity of the offence. Additionally, section 218A of the Act specifies that a person who makes a false or misleading statement in an application for a tariff concession order commits an offence and is liable for a penalty of up to $22,200 for individuals and $111,000 for corporations. These penalties underscore the importance of adhering to the statutory requirements and accurately completing applications.