EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802326
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.
BHP Nickel West Pty Ltd applied for a TCO in respect of certain helical volute springs on 08 February 2008.
Instrument
TCO No 0802326 was made on 18 April 2008. It declares that those certain helical volute springs 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. 0802326 is taken to have come into force on 08 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the administration of customs and excise duties. Specifically, Part XVA of this Act establishes a scheme allowing for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders grant preferential duty rates for certain goods, addressing the gap by providing relief to importers who can demonstrate that no substitutable goods are produced in Australia. BHP Nickel West Pty Ltd's application for a TCO concerning certain helical volute springs was approved on 8 February 2008, effective from the date of application, as per the Act. The CEO, having satisfied with the core criteria and receiving no objections, declared that these springs would benefit from a zero duty rate under item 50 of Schedule 4 to the Tariff, down from the general rate of 5%. This legislative instrument aims to foster fair trade practices by ensuring that Australian importers are not unduly disadvantaged and that the importation of certain goods is economically viable.
Scope and Application
The Tariff Concession Instrument No. 0802326, which is made under the Customs Act 1901, applies to entities seeking tariff concessions on specific goods imported into Australia. Specifically, it pertains to BHP Nickel West Pty Ltd’s application for a Tariff Concession Order (TCO) in respect of certain helical volute springs. This instrument facilitates the process whereby a lower rate of customs duty is applied to these goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The instrument was enacted to ensure that the application met the core criteria set out in the Act, which include the absence of Australian-produced substitutable goods. The application was processed and approved, resulting in the declaration that the specified helical volute springs are subject to a zero rate of duty, differing from the general rate of 5% for such goods. The application of this concession is governed by the Customs Act 1901 and extends to the Commonwealth, impacting the rights of importers to claim refunds for duties paid on these goods since the effective date of the TCO.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0802326 (TCO No. 0802326) under the Customs Act 1901 involve the granting of tariff concessions for certain goods. According to section 269F, a person may apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of specified goods (subsection 269P(3)). For the CEO to make a TCO, the application must meet the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. In this case, the CEO determined that the application for certain helical volute springs met these criteria, as no substitutable goods were produced in Australia (section 269B and 269E).
The obligations imposed by this Act on the parties involved are primarily administrative and procedural. The CEO of Customs is required to evaluate applications to ensure they meet the core criteria, and to make a written order if the application is valid. Furthermore, 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 (subsection 269K(1)). In this instance, the CEO did not receive any submissions in response to the notice published.
For breaches of the provisions within the Customs Act 1901, there may be civil and criminal consequences. While the explanatory statement does not provide specific details regarding offences or penalties, breaches of the Customs Act can result in fines, imprisonment, or both, depending on the severity and nature of the offence. The maximum penalties for breaches of the Customs Act can include fines of up to $22,000 for individuals and up to $220,000 for corporations, along with potential imprisonment terms. However, it is important to note that the specific penalties for any given breach will depend on the particular circumstances and the discretion of the court.