EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721823
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.
Boskalis Australia Pty Limited applied for a TCO in respect of certain dredging hoses on 18 December 2007.
Instrument
TCO No 0721823 was made on 14 March 2008. It declares that those certain dredging hoses 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. 0721823 is taken to have come into force on 18 December 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, was introduced to regulate the importation and exportation of goods in Australia, including the imposition and collection of customs duties. The Act allows for the granting of Tariff Concession Orders (TCOs) through which a lower rate of customs duty may apply to specified goods. F2008L00976, a Tariff Concession Instrument No. 0721823, was made under this Act to provide free duty on certain dredging hoses for Boskalis Australia Pty Limited, effective from the date of their application, 18 December 2007. The instrument was made after it was determined that no substitutable goods were produced in Australia, satisfying the core criteria for a TCO under section 269C of the Act. This concession aims to benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the commencement date of the TCO, without imposing any liabilities on individuals other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes the framework for Tariff Concession Orders (TCOs), which are administered by the Chief Executive Officer of Customs. This legislation applies to individuals or entities seeking to import goods into Australia that are not produced domestically and that do not correspond to goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The scope of the Act is national, extending across the Commonwealth of Australia. The application for a TCO must meet the core criteria outlined in section 269C, which necessitates that no substitutable goods are produced in Australia at the time of application. The process requires publication of the application in the Gazette, inviting any interested parties to submit objections, although in this instance, no submissions were received. The instrument in question, TCO No. 0721823, was made effective from the date the application was lodged, 18 December 2007, and pertains to certain dredging hoses, granting them a tariff concession under item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively reducing the duty from 5% to free. The application of this TCO does not affect the rights or impose liabilities on any person except the Commonwealth, and importers can apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The key provisions of this legislation are found in sections 269C, 269F, and 269P of the Customs Act 1901 (the Act), which govern the process of applying for and granting Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (the CEO). Section 269F allows a person to apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria set out in section 269C, and the goods are not specified in section 269SJ (goods that cannot be subject to a TCO), the CEO must make a written order, a TCO, that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). In this case, TCO No. 0721823, made on 14 March 2008, declares that certain dredging hoses are subject to a free rate of duty instead of the general rate of 5%.
The Act imposes certain obligations and requirements on the parties involved in the TCO process. An applicant must ensure their application for a TCO complies with section 269F of the Act. The CEO must determine if the application meets the core criteria, which include verifying that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). If the CEO is satisfied, they must make a written TCO as per section 269P(3). Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made. In this instance, no submissions were received.
The Act also outlines potential consequences for non-compliance with its provisions. While specific offences and penalties are not detailed in this particular Explanatory Statement, breaches of the Customs Act 1901 could result in both civil and criminal penalties, depending on the nature and severity of the breach. For example, general offences under the Act might include providing false or misleading information, which could result in fines or imprisonment. However, the Explanatory Statement does not provide details on maximum penalties applicable to this specific TCO. It is important to note that the TCO itself does not impose any liabilities on any person, and the rights of importers will be beneficially affected.