EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0801919
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.
Minova Australia Pty Ltd applied for a TCO in respect of certain bolts on 1 February 2008.
Instrument
TCO No 0801919 was made on 11 April 2008. It declares that those certain bolts 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. 0801919 is taken to have come into force on 1 February 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. 0801919 was enacted under the Customs Act 1901 to address the need for a streamlined process to reduce or eliminate customs duties on certain imported goods, where there are no substitutable goods produced domestically. This legislative instrument was introduced to support economic efficiency by lowering the cost of imported goods, thereby enhancing their competitiveness in the Australian market and potentially benefiting consumers through lower prices. The instrument was developed by the Commonwealth Government and specifically targets the facilitation of trade by reducing the administrative burden on importers and ensuring that the concessions are granted in a transparent and predictable manner. The policy objective is to promote fair and equitable trade practices by ensuring that tariff concessions are only applied where they serve to benefit the Australian market without disadvantaging domestic producers.
Scope and Application
The Customs Act 1901, specifically through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation allows for the application of a lower rate of customs duty on goods specified in a TCO. The Act applies to any person or entity that may apply for a TCO in relation to goods not specified in section 269SJ, which excludes certain goods from being subject to a TCO. The Act’s geographic reach is national, as it pertains to the Commonwealth of Australia and applies to transactions involving the importation of goods into Australia. If the CEO is satisfied that an application meets the core criteria, namely that no substitutable goods are produced in Australia in the ordinary course of business, a TCO is made declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The CEO must also publish a notice in the Gazette, inviting any person to lodge a submission if they consider there are reasons why the TCO should not be made. This process ensures transparency and provides an opportunity for public input. The application of the TCO is retroactive to the date of application lodging, thereby affecting the rights of importers beneficially by potentially allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0801919 under the Customs Act 1901 (the Act) concern the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (the CEO) (section 269F). This instrument declares that certain bolts are subject to a TCO, resulting in a rate of duty of free, as opposed to the general rate of duty of 5% (section 269P(3)). The instrument specifies that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) (section 269P(3)). Section 269C outlines the core criteria that a TCO application must meet, which in this case was determined to be satisfied by the CEO, as there were no substitutable goods produced in Australia at the time the application was lodged.
The Act imposes several obligations and requirements on the parties involved in the process of applying for a TCO. Firstly, a person must apply to the CEO for a TCO in respect of goods (section 269F). The CEO must ensure that the application is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring the goods to which the TCO applies (section 269P(3)). Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO. This ensures transparency and provides an opportunity for interested parties to voice their concerns.
The Act provides for certain consequences in the event of a breach of its provisions. While the specific offences and penalties are not detailed in the Explanatory Statement, breaches of the Customs Act 1901 can lead to criminal charges and penalties under sections 237 and 238 of the Act. Criminal penalties can include substantial fines and/or imprisonment, depending on the severity and intent of the breach. Furthermore, civil consequences may also arise, including financial penalties, confiscation of goods, and legal costs. The Act's provisions are designed to ensure compliance and protect the integrity of the customs duty system.
In summary, the Tariff Concession Instrument No. 0801919 under the Customs Act 1901 establishes a framework for the CEO to grant TCOs that reduce the duty on certain goods. The Act imposes obligations on applicants to meet specific criteria and on the CEO to process applications and ensure transparency. While the specific penalties for breach are not detailed in the Explanatory Statement, the Act provides for both criminal and civil consequences for non-compliance, ensuring the enforcement of its provisions and the protection of the customs duty system.