EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802797
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.
Tabata Australia Pty Ltd applied for a TCO in respect of certain buoyancy divers on 19 February 2008.
Instrument
TCO No 0802797 was made on 28 April 2008. It declares that those certain buoyancy divers 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. 0802797 is taken to have come into force on 19 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 imposition of customs duties on goods imported into Australia. The Act was designed to regulate and control the import and export of goods, ensuring compliance with customs requirements and generating revenue through customs duties. Part XVA of the Customs Act 1901 introduces a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. These orders apply a lower rate of customs duty to specified goods, provided certain criteria are met. The primary objective of this legislative framework is to facilitate trade by reducing the duty burden on goods that are not produced domestically, thus encouraging the importation of these goods and potentially stimulating economic activity. This is achieved through the process of applying for a TCO and, if approved, the implementation of a concessional duty rate.
Scope and Application
The Tariff Concession Instrument No. 0802797 under the Customs Act 1901 applies to specific goods that are the subject of a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. This instrument pertains to goods for which a lower rate of customs duty is applicable, as determined by the CEO. It applies to individuals or entities that have applied for and received a TCO for their goods, ensuring that these goods benefit from the reduced duty rates specified in the order. The geographic and jurisdictional reach of this Act is national, as it pertains to the entire Commonwealth of Australia, thereby impacting all importers and entities involved in the importation of goods subject to the TCO. The Act excludes goods specified in section 269SJ of the Customs Act, which are not eligible for a TCO. Additionally, the CEO must ensure that no substitutable goods produced in Australia are in the ordinary course of business before granting a TCO. The application of the TCO is extended or restricted through subordinate instruments, including the Customs Tariff Act 1995, which specifies the particular items and duty rates applicable to the goods subject to the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0802797 under the Customs Act 1901 (section 269C) concern the requirements and process for making a Tariff Concession Order (TCO). A person may apply for a TCO if they wish to reduce the customs duty on certain goods (section 269F). The Chief Executive Officer of Customs (CEO) must consider whether the application meets the core criteria, which is when no substitutable goods are produced in Australia in the ordinary course of business (section 269C). If the CEO is satisfied that the application meets these criteria, they must make a TCO, specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). In this case, TCO No. 0802797 was made on 28 April 2008, applying to certain buoyancy divers and granting them a tariff concession so that the duty on these goods is free, whereas the general rate of duty is 5% (section 126(1)(r) of the Regulations).
The obligations imposed by the Act on the parties or entities it governs include the requirement for a person to apply for a TCO if they wish to reduce the customs duty on certain goods (section 269F). The CEO has the responsibility to determine whether the application meets the core criteria and to make a written TCO if it does (section 269C and section 269P(3)). The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). The CEO is further required to ensure that the rights of persons other than the Commonwealth are not adversely affected by the TCO (subsection 269S(1)).
The Act does not explicitly state any offences, penalties, or consequences for breach of the TCO provisions. However, the Act does provide for the general enforcement of customs laws, which could include penalties for non-compliance with customs regulations. For example, section 244 of the Customs Act 1901 provides that any person who contravenes the Act or the Regulations may be liable to a penalty of up to $11,100 for individuals and $55,500 for bodies corporate. There are also provisions for prosecution and conviction, with penalties that can include imprisonment for up to two years for individuals and five years for bodies corporate (section 245). The CEO's role in ensuring compliance with the TCO provisions would likely involve these general enforcement mechanisms.