EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0800330
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.
PCH Group Limited applied for a TCO in respect of certain scaffolding components on 07 January 2008.
Instrument
TCO No 0800330 was made on 25 March 2008. It declares that those certain scaffolding 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. 0800330 is taken to have come into force on 07 January 2008.
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 Tariff Concession Instrument No. 0800330, enacted in 2008, is an instrument under the Customs Act 1901, which facilitates the granting of tariff concessions for specific goods. This instrument was introduced to address the need for a streamlined process to provide relief on customs duties for certain goods that are not produced in Australia, thereby encouraging importation and potentially reducing costs for businesses and consumers. The instrument was enacted by the Commonwealth Parliament and its policy objective is to support industries by making certain imported goods more affordable, thus aiding economic activities and potentially contributing to competitive markets. The instrument allows the Chief Executive Officer of Customs to make a Tariff Concession Order (TCO) for goods specified in an application, provided the application meets certain core criteria and no substitutable goods are produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 0800330 applies to specific scaffolding components as identified in the application by PCH Group Limited, and it is governed by Part XVA of the Customs Act 1901. This Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that provide lower rates of customs duty for certain goods. The application of the TCO is contingent upon the CEO determining that no substitutable goods are produced in Australia in the ordinary course of business. This instrument directly benefits importers of the specified scaffolding components by reducing the customs duty from the general rate of 5% to zero, effective from the date the application was lodged, which was 07 January 2008. The TCO does not impose any liabilities on any person and does not affect the rights of any person other than the Commonwealth, thereby ensuring that no pre-existing rights or obligations are adversely affected. The TCO's geographic and jurisdictional reach is aligned with the Commonwealth's customs laws, and it does not extend to any goods specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. The TCO's application can be further defined or extended through subordinate instruments as necessary.
Key Provisions
The primary operative sections of the Customs Act 1901 in relation to Tariff Concession Orders (TCOs) are sections 269C, 269B, 269D, 269E, and 269F. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO, provided that the goods in question do not fall under the exclusions specified in section 269SJ. If the CEO determines that the application meets the core criteria, which include the absence of substitutable goods being produced in Australia as of the application date (section 269C), they must issue a written order declaring the goods to which the concession applies (subsection 269P(3)). This decision is informed by the definitions in sections 269B and 269D, which respectively clarify what constitutes 'goods produced in Australia' and 'ordinary course of business'.
The Act imposes several obligations on both applicants and the CEO. Applicants must ensure their applications are made in accordance with the Act and must provide any necessary information to support the claim that no substitutable goods are being produced in Australia. The CEO, on the other hand, has the responsibility to assess the application against the core criteria, publish notices inviting submissions from interested parties, and respond to any submissions received. If no objections are raised, and the CEO is satisfied that the application meets the core criteria, they must make the TCO. This process is further detailed in subsection 269K(1), which mandates the publication of the application in the Gazette.
The Customs Act 1901 does not explicitly outline specific offences or penalties for breaches related to TCOs. However, the act generally provides for penalties under other sections if the application process or the concession itself is misused. For example, providing false or misleading information in an application could potentially attract penalties under the general provisions of the Act or related legislation. In terms of civil or criminal consequences, while the explanatory statement does not specify penalties for TCO breaches, the broader framework of the Customs Act includes provisions for fines and imprisonment for more severe customs-related offences. The exact penalties would depend on the specific nature and severity of the breach.