EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0800381
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 Resources (QLD) Pty Ltd applied for a TCO in respect of certain road making chip spreaders on 9 January 2008.
Instrument
TCO No 0800381 was made on 25 March 2008. It declares that those certain road making chip spreaders 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. 0800381 is taken to have come into force on 9 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 Customs Act 1901, enacted by the Parliament of Australia, establishes a framework for the regulation of imports and exports, including the imposition of customs duties on goods entering the country. One of the mechanisms within this Act is the Tariff Concession Order (TCO), which provides relief from certain customs duties under specific circumstances. This concession is intended to support Australian industries by reducing the cost of imported goods that do not have local alternatives, thereby promoting competitive market conditions and potentially aiding in the development of local production capabilities. The Tariff Concession Instrument No. 0800381, made under the authority of the Customs Act, was introduced to address the specific needs of Boral Resources (QLD) Pty Ltd, which applied for a concession on road making chip spreaders. The instrument was designed to ensure that these goods are subject to a reduced duty rate, reflecting the policy objective of supporting the local industry by mitigating the impact of imported goods that could otherwise compete with Australian-made products.
Scope and Application
The Tariff Concession Instrument No. 0800381 under the Customs Act 1901 applies specifically to certain road making chip spreaders, following an application by Boral Resources (QLD) Pty Ltd on 9 January 2008. The instrument is designed to provide tariff concessions by allowing a lower rate of customs duty on these specified goods. This application process is governed by the Act, where the Chief Executive Officer of Customs is the authority responsible for deciding whether an application meets the core criteria for tariff concessions, particularly focusing on whether substitutable goods are produced in Australia. The instrument came into effect on the date the application was lodged, 9 January 2008, and it declares that these road making chip spreaders are subject to item 50 of Schedule 4 to the Tariff, resulting in a duty-free status for these goods. The legislation ensures that no existing rights of persons other than the Commonwealth are adversely affected by the issuance of this TCO, while also allowing importers to apply for duty refunds on goods imported since the effective date of the concession.
Key Provisions
The primary operative sections of this legislation concern the establishment and effect of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901 (the Act). Section 269F allows for the application to the Chief Executive Officer of Customs (the CEO) for a TCO, provided the goods in question are not those specified in section 269SJ, which excludes certain goods from TCO consideration. If the application is deemed valid and meets the core criteria outlined in section 269C, the CEO must issue a written order, a TCO, as per subsection 269P(3), specifying that the goods are subject to a prescribed rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties or entities it governs include the requirement for the CEO to consider applications for TCOs and determine whether they meet the core criteria. This involves ensuring that no substitutable goods are produced in Australia, as defined by sections 269D, 269E, and 269F. Additionally, 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. In this case, no submissions were received. The Act also requires that TCOs not affect the rights of any person adversely or impose liabilities for actions taken before the TCO comes into effect.
The legislation provides for civil and criminal consequences for breaches of the Act's provisions. Although specific offences and penalties are not detailed in the explanatory statement, breaches of customs regulations generally can lead to fines and imprisonment under the Customs Act 1901. The maximum penalties can vary widely depending on the nature and severity of the breach but can include substantial fines and imprisonment terms that reflect the seriousness of the offence. The precise penalties would be determined by the courts based on the specific circumstances of the breach.