EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802491
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.
Western Kingfish Limited applied for a TCO in respect of certain brass netting on 3 April 2008.
Instrument
TCO No 0802491 was made on 20 June 2008. It declares that those certain brass netting 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. 0802491 is taken to have come into force on 3 April 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 Australian Parliament, provides for the imposition of customs duty on imported goods. Under this Act, Tariff Concession Orders (TCOs) can be made to apply a lower rate of customs duty on certain goods, provided they meet specific criteria. The Tariff Concession Instrument No. 0802491 was introduced to address the need for tariff concessions in specific cases where no substitutable goods are produced in Australia, thereby ensuring that Australian consumers and businesses are not unduly burdened by customs duties on goods that are not locally produced. The policy objective of this instrument is to facilitate the import of goods that are essential but not produced domestically, thereby promoting trade and economic efficiency. The instrument was developed following an application by Western Kingfish Limited for a TCO on certain brass netting, which was approved by the Chief Executive Officer of Customs after confirming that no substitutable goods were produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 0802491 under the Customs Act 1901 applies to goods specified in the instrument, which in this case are certain brass netting. The Act facilitates the application process for tariff concessions, allowing entities such as Western Kingfish Limited to seek lower rates of customs duty for goods not produced in Australia and for which no substitutable goods are available. This process involves the Chief Executive Officer of Customs, who must determine whether the application meets the core criteria set out in the Act. Specifically, Section 269C of the Act stipulates that an application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The geographic reach of this Act is national, operating under the Commonwealth of Australia, and it extends to any goods imported into Australia. The Act does not apply to goods specified in Section 269SJ, which lists those that cannot be subject to a tariff concession order. The commencement of the TCO is effective from the date the application was lodged, and it does not disadvantage any person by imposing liabilities for actions taken prior to its registration.
Key Provisions
The Customs Act 1901 (the Act) provides a framework through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (the CEO) under section 269F (1). When an application for a TCO is submitted, the CEO must determine if it meets the core criteria outlined in section 269C. This determination is made by assessing whether, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269D and 269E). If the application satisfies these conditions, the CEO is required to issue a written TCO, specifying that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995 (Tariff) (subsection 269P(3)).
Entities such as Western Kingfish Limited must adhere to the stipulated procedures when applying for a TCO. Upon receiving an application, the CEO must publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not proceed (subsection 269K(1)). This notice ensures transparency and allows for potential objections. In the case of Western Kingfish Limited's application for brass netting, the CEO did not receive any objections. The TCO then comes into force on the date the application was lodged (subsection 269S(1)). This means that the TCO for the brass netting, declared under item 50 of Schedule 4 of the Tariff, is effective as of 3 April 2008.
The obligations imposed by the Act on the CEO include verifying that the application for a TCO meets the core criteria, consulting with the public through the Gazette, and ensuring that the rights of non-Commonwealth entities are not adversely affected by the TCO. Importers of the goods subject to the TCO can benefit from a refund of duty paid on those goods since the effective date of the TCO (paragraph 126(1)(r) of the Regulations). The Act explicitly states that the TCO does not impose any new liabilities on any person.
Failure to comply with the requirements of the Act may result in civil or criminal consequences. Although the explanatory statement does not detail specific penalties, breaches of the Customs Act 1901 can lead to substantial fines and imprisonment. The severity of the penalties typically depends on the nature and extent of the breach. Therefore, entities must ensure strict adherence to the provisions outlined in the Act to avoid any potential legal ramifications.