EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0805861
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.
Custom Fluidpower Pty Ltd applied for a TCO in respect of certain brake rail clamp on 30 April 2008.
Instrument
TCO No 0805861 was made on 18 July 2008. It declares that those certain brake rail clamp 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. 0805861 is taken to have come into force on 30 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 Commonwealth Parliament, provides a framework for the imposition of customs duties and includes provisions for the creation of Tariff Concession Orders (TCOs). These orders grant preferential tariff treatment to specific goods, subject to certain criteria being met. TCOs are a means to address specific economic needs and policy objectives by providing tariff relief, thereby facilitating trade and supporting industry sectors that may benefit from reduced import costs. The enactment of this legislation aimed to fill a gap by offering a structured process for the application and approval of tariff concessions, ensuring that the granting of such concessions is both fair and targeted.
Tariff Concession Instrument No. 0805861, issued under the authority of the Customs Act 1901, was introduced to provide tariff relief for certain brake rail clamps. Custom Fluidpower Pty Ltd applied for this concession, and after review, the Chief Executive Officer of Customs determined that the application met the core criteria, as no substitutable goods were produced in Australia. Consequently, the instrument declares that these specific brake rail clamps are subject to a free rate of duty, down from the general rate of 5%. This measure is expected to benefit importers by potentially allowing them to claim refunds for duties paid on these goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0805861, made under the Customs Act 1901, applies to goods specified in the instrument, namely certain brake rail clamps. The instrument was issued following an application by Custom Fluidpower Pty Ltd on 30 April 2008. The application was accepted by the Chief Executive Officer of Customs, who determined that a lower rate of customs duty applies to these goods as they are not substitutable by goods produced in Australia. The instrument declares that these brake rail clamps are subject to a free rate of duty, as opposed to the general rate of 5% applicable to similar goods. The instrument is effective from the date the application was lodged, thereby not disadvantaging any existing rights of parties other than the Commonwealth. Additionally, importers of these goods can apply for duty refunds on imports since the effective date of the instrument. The instrument's scope is limited to the specified goods and does not extend to any other goods or entities unless explicitly included in future instruments.
Key Provisions
The Tariff Concession Instrument No. 0805861 under the Customs Act 1901 (the Act) introduces specific provisions regarding tariff concessions for certain goods, namely brake rail clamps. According to section 269F, a person may apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of these goods. If the CEO determines that the application does not pertain to goods listed in section 269SJ, which are ineligible for TCO, they must assess whether the application meets the core criteria as outlined in section 269C. For a TCO application to meet these criteria, it must be established that, on the date the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business.
The obligations imposed by this Act on the parties involved, particularly Custom Fluidpower Pty Ltd, who applied for the TCO, are stringent. They must ensure that their application adheres to the stipulations set forth in section 269C, demonstrating that no substitutable goods were produced in Australia. Additionally, the CEO, as per subsection 269K(1), is obligated to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. Although no submissions were received in response to this invitation, the CEO must still proceed with their duties as prescribed. Once the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
In the event of non-compliance with the Act’s provisions, there are specified offences and penalties. Although the explanatory statement does not detail specific offences or penalties, breaches of the Customs Act 1901 typically result in significant penalties. For instance, section 236 of the Act stipulates that a person who commits an offence against the Act is liable to a penalty of up to $22,000 or imprisonment for up to five years, or both, for each offence. Additionally, civil penalties can apply for failure to comply with customs regulations, potentially leading to financial penalties or other sanctions. These consequences underscore the importance of adhering to the legislative requirements set forth by the Customs Act 1901.