EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0801034
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.
Pacific Industrial Supplies Pty Ltd applied for a TCO in respect of certain welding head manipulator on 18 January 2008.
Instrument
TCO No 0801034 was made on 04 April 2008. It declares that those certain welding head manipulators 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. 0801034 is taken to have come into force on 18 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 was enacted to facilitate the regulation of customs and excise duties in Australia, providing a framework for the administration and enforcement of these duties. One of the key mechanisms within the Act is the Tariff Concession Order (TCO) scheme, introduced to address the issue of providing tariff relief on specific goods under certain conditions. The 2008 Tariff Concession Instrument No. 0801034, made by the Chief Executive Officer of Customs under the authority granted by the Customs Act, is a specific instance of this scheme. This instrument was introduced in response to an application by Pacific Industrial Supplies Pty Ltd for tariff concessions on certain welding head manipulators. The policy objective is to ensure that Australian industry can access necessary goods at a reduced tariff rate, provided no substitutable goods are produced domestically, thereby promoting fair competition and supporting Australian businesses. The instrument does not adversely affect any person's rights as of the registration date and allows importers to apply for duty refunds on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0801034 under the Customs Act 1901 applies to Pacific Industrial Supplies Pty Ltd in relation to certain welding head manipulators that were the subject of their application for a Tariff Concession Order (TCO). The Act allows the Chief Executive Officer of Customs to grant a TCO, which applies a lower rate of customs duty on specified goods, provided certain criteria are met. This particular TCO was granted because it was determined that no substitutable goods were produced in Australia on the day the application was lodged, as required by section 269C of the Act. The TCO, which came into force on the date of the application, 18 January 2008, provides a free rate of duty on the specified goods, whereas the general rate would have been 5%. The TCO does not affect the rights of any person as at the date of registration to their disadvantage and does not impose any new liabilities; however, it does entitle importers to apply for a refund of duty on goods imported since the effective date of the TCO. The instrument extends the application of the Act by providing specific concessions for the goods in question, subject to the conditions and exclusions as outlined in the Act and the Tariff.
Key Provisions
The primary sections of the Customs Act 1901 relevant 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 of Customs (CEO) for a TCO for certain goods. Section 269C outlines that the application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Sections 269B and 269D further define terms such as "goods produced in Australia" and "ordinary course of business," while section 269E explains "ordinary course of business." If the CEO is satisfied that the application meets these criteria, they must issue a written order, as stipulated in section 269P(3).
The Act imposes several obligations on the parties involved. The CEO must ensure that the application for a TCO is not in respect of goods specified in section 269SJ of the Act, which are ineligible for TCOs. Once an application is deemed valid, the CEO is required to publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made, as per subsection 269K(1). The CEO must also consider any submissions received and make a decision on whether to grant the TCO based on the core criteria. If the criteria are met, the CEO must issue the TCO, which will then apply from the date the application was lodged, as outlined in subsection 269S(1).
The Act includes provisions for potential breaches and their consequences. While the explanatory statement does not specify detailed penalties, it is known that failure to comply with the Customs Act 1901 can result in both civil and criminal penalties. For instance, under the Crimes Act 1914, offences related to customs and excise can attract significant fines and imprisonment. The maximum penalties for these offences can vary, but they often include substantial fines up to several thousand dollars and imprisonment for several years, depending on the severity of the breach. Additionally, the Act ensures that the rights of importers are protected, and no person, other than the Commonwealth, will be disadvantaged or have liabilities imposed on them for actions taken before the TCO was registered.
The Tariff Concession Instrument No. 0801034, which was issued on 4 April 2008, applies to certain welding head manipulators, reducing their duty from the general rate of 5% to free. This instrument came into force on 18 January 2008, the date the application was lodged. The TCO does not affect any existing rights of persons other than the Commonwealth, ensuring that no one is disadvantaged or incurs liabilities for actions taken before the registration of the TCO. Importers of the affected goods can benefit from this concession by applying for a refund of duty paid on goods imported since the effective date of the TCO. The Act's provisions aim to streamline the application process and ensure clarity and fairness in the implementation of tariff concessions.