EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720221
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.
Marketmakers (Aust) Pty Ltd applied for a TCO in respect of certain wire mesh on 26 November 2007.
Instrument
TCO No 0720221 was made on 29 February 2008. It declares that those certain wire mesh 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. 0720221 is taken to have come into force on 26 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 by the Parliament of Australia to regulate the import and export of goods, including the imposition of customs duties. In addressing the need to provide tariff concessions for certain goods, the Act was amended to include Part XVA, which allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders provide a lower rate of customs duty on specified goods, contingent on certain criteria being met, such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 0720221, issued on 29 February 2008, exemplifies this process by granting a tariff concession on certain wire mesh, reducing the duty rate from 5% to free, effective from the date of the application, 26 November 2007. This legislative framework and its application aim to promote economic efficiency by ensuring that Australian consumers and businesses can access certain imported goods at a reduced cost, without disadvantaging existing rights or imposing new liabilities.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aiming to reduce customs duty rates on specific goods. This process is applicable to any individual or entity that wishes to apply for a TCO for goods that are not restricted under section 269SJ of the Act, such as goods that have no Australian-made substitutes. The application must meet core criteria, notably that no substitutable goods were produced in Australia in the ordinary course of business at the time of application. Once a TCO is granted, it applies to the goods specified, effectively providing a concession on the duty rate from the date the application was lodged, as outlined in subsection 269S(1). This Act operates on a Commonwealth level, impacting trade and customs duties nationally. Notably, the Act ensures that the rights of existing parties are protected, and no new liabilities are imposed on individuals or entities other than the Commonwealth, as per the legislative intent to provide relief without causing undue disadvantage or additional burdens.
Key Provisions
The Tariff Concession Order (TCO) No. 0720221, established under section 269F of the Customs Act 1901, provides a lower rate of customs duty for certain wire mesh products (s269P(3)). This concession applies if the Chief Executive Officer of Customs (CEO) determines that no substitutable goods are produced in Australia at the time the application is lodged (s269C). The CEO must ensure that the application does not pertain to goods specified in section 269SJ, which lists those ineligible for TCOs. Once the core criteria are met, the CEO is required to issue a written order declaring that the specified goods are subject to a prescribed rate in Schedule 4 of the Customs Tariff Act 1995. For the wire mesh in question, the general rate of duty is 5%, but under this TCO, the duty is free.
The Act imposes specific obligations on applicants, such as Marketmakers (Aust) Pty Ltd, who must ensure their applications meet the core criteria laid out in sections 269C and 269SJ. The CEO, on the other hand, has the responsibility to verify these criteria and, if satisfied, to make a TCO and publish a notice inviting submissions from interested parties (s269K(1)). The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on them for actions taken before the order's registration (s269S(1)). In this case, the CEO accepted the application without receiving any objections.
Failure to comply with the provisions of the Customs Act 1901 can result in significant legal consequences. For example, incorrect applications that do not meet the core criteria or involve ineligible goods could lead to the rejection of the TCO application. Additionally, any misrepresentation or fraudulent behaviour in the application process may result in criminal charges. While the explanatory statement does not detail specific penalties, breaches of customs regulations generally can lead to fines and imprisonment under the Customs Act and related legislation. The exact penalties would depend on the nature and severity of the breach.