EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719361
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 props on 13 November 2007.
Instrument
TCO No 0719361 was made on 29 January 2008. It declares that those certain props 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. 0719361 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 was enacted to facilitate and regulate the importation and exportation of goods in Australia, providing a framework for the collection of customs duty and other charges. Part XVA of the Act, introduced to address the need for a streamlined process for granting tariff concessions on specific goods, allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to lower the customs duty on certain goods. This mechanism was established to ensure that Australian industries are not unduly disadvantaged by the availability of substitute goods produced domestically. The policy objective is to support and protect Australian industries by providing tariff relief on goods for which no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0719361 was issued by the CEO on 29 January 2008, following an application by Boral Formwork And Scaffolding Pty Limited for a TCO on certain props, effectively granting a duty-free status to these goods starting from 13 November 2007, the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0719361 under the Customs Act 1901 applies specifically to goods identified in the application by Boral Formwork And Scaffolding Pty Limited for a Tariff Concession Order (TCO). This Act allows the Chief Executive Officer of Customs to grant tariff concessions on certain goods if certain criteria are met. These criteria include the absence of substitutable goods being produced in Australia at the time of the application. The instrument applies to the identified props, which now attract a duty rate of free, down from the general rate of 5%. The Act’s application is nationwide, encompassing the entire Commonwealth of Australia. However, it excludes goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The instrument came into effect on the date the application was lodged, 13 November 2007, and does not retroactively disadvantage or impose liabilities on any person other than the Commonwealth. Importers of these goods may also apply for a refund of duty paid before the TCO's effective date. The scope of the Act can be extended or restricted through subordinate instruments, ensuring its adaptability to various economic and trade scenarios.
Key Provisions
The key sections of the Tariff Concession Instrument No. 0719361 (referred to as TCO No. 0719361) under the Customs Act 1901 include sections 269C, 269B, 269D, 269E, 269F, 269K, 269P, 269S, and 269SJ. These sections outline the criteria and process for applying for a Tariff Concession Order (TCO) and the conditions under which such an order may be granted. Specifically, section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods, while section 269C specifies that the application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269K mandates that the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. Finally, section 269S(1) states that the TCO is taken to have come into force on the day the application for the TCO was lodged.
The obligations imposed by the Act on the parties involved include the requirement for the CEO to consider applications for TCOs and to ensure that they meet the core criteria set out in the Act. The CEO must also publish a notice in the Gazette to invite submissions from any interested parties. In this case, Boral Formwork And Scaffolding Pty Limited applied for a TCO on 13 November 2007, and the CEO was required to assess whether the application met the core criteria and to make a written order if it did. Additionally, any person who believes there are reasons why a TCO should not be made has the opportunity to lodge a submission with the CEO.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations may result in various penalties and consequences. Although the explanatory statement does not detail specific offences, penalties, or consequences for breach, under the general provisions of the Customs Act, breaches can lead to civil or criminal penalties. For civil penalties, the Act may impose fines up to a maximum of 10,000 penalty units for individuals and 50,000 penalty units for bodies corporate, as specified in section 284. Criminal penalties may include imprisonment for up to five years, as stipulated in section 285. The exact penalties depend on the nature and severity of the breach, and the courts have the discretion to impose penalties within the statutory limits.