EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0806623
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.
Beaver Brands Pty Limited applied for a TCO in respect of certain flipper delta anchors on 06 May 2008.
Instrument
TCO No 0806623 was made on 25 July 2008. It declares that those certain flipper delta anchors 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. 0806623 is taken to have come into force on 06 May 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 was enacted by the Parliament of Australia and is a comprehensive statute governing the administration of customs and excise in Australia. The Act was introduced to address the need for a cohesive legal framework regulating the importation and exportation of goods, including the imposition and collection of customs duties. One of the mechanisms established under the Act is the Tariff Concession Order (TCO), which allows for the application of a lower rate of customs duty on certain goods, provided specific criteria are met. The explanatory statement for Tariff Concession Instrument No. 0806623 details the process and application of a TCO for certain flipper delta anchors by Beaver Brands Pty Limited. The instrument was enacted to provide tariff concessions for these goods, aiming to benefit the rights of importers by allowing them to apply for a refund of duty paid on these goods since the effective date of the TCO, which aligns with the date the application was lodged. This approach ensures that the policy objective of providing tariff relief is met without disadvantaging any party or imposing new liabilities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any individual or entity seeking to import goods that are eligible for tariff concessions, provided they meet the specified criteria. The scope of the legislation extends nationally, impacting importers of goods across Australia. The Act's application is limited by exclusions outlined in section 269SJ, which specifies goods that cannot be subject to a TCO. The geographic reach of this legislation is nationwide, applying uniformly across all states and territories of Australia. The instrument, Tariff Concession Instrument No. 0806623, was issued on 25 July 2008, and it came into effect on 6 May 2008, the date the application was lodged. The TCO benefits importers by setting the duty on certain flipper delta anchors to free, as opposed to the general rate of 5%, and it does not disadvantage or impose liabilities on any person other than the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0806623 pertain to the establishment of a Tariff Concession Order (TCO) for certain flipper delta anchors, as detailed in section 269P(3) of the Customs Act 1901. This section mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application for a TCO meets the core criteria, the CEO must issue a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. For the specific flipper delta anchors in question, item 50 of Schedule 4 applies, granting these goods a duty-free status. The core criteria, outlined in section 269C of the Act, require that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The Act imposes specific obligations on both applicants and the CEO. For applicants, the primary obligation is to ensure that their application for a TCO is lodged in accordance with the Act's provisions and that it meets the core criteria set out in section 269C. The CEO, on the other hand, must assess the application to determine if it meets the core criteria and, if satisfied, issue a written TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as per subsection 269K(1) of the Act.
Failure to comply with the requirements of the Customs Act 1901 and the associated regulations can lead to various offences and penalties. Although the explanatory statement does not explicitly detail the penalties for non-compliance, breaches of customs laws generally attract significant penalties under the Customs Act and the Crimes Act 1914. For instance, knowingly making a false statement or representation can result in fines of up to $22,200 or imprisonment for up to two years, or both, under section 234 of the Crimes Act. Furthermore, failure to comply with the TCO could result in the imposition of additional duties or fines as deemed appropriate by the Commissioner of Customs. The precise penalties would depend on the nature and severity of the breach, but they are intended to ensure compliance with the Act’s requirements and the protection of the Commonwealth’s revenue.