EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0809061
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.
Rope And Chain Company applied for a TCO in respect of certain kiln chains on 21 May 2008.
Instrument
TCO No 0809061 was made on 08 August 2008. It declares that those certain kiln chains 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. 0809061 is taken to have come into force on 21 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, enacted by the Parliament of Australia, establishes a framework for tariff concession orders (TCOs) which provide lower rates of customs duty for certain goods. This legislation was introduced to address the need for economic incentives that encourage the importation of specific goods by reducing their duty rates. The Tariff Concession Instrument No. 0809061, made under this Act, aims to provide a tariff concession for certain kiln chains, as no substitutable goods were produced in Australia in the ordinary course of business. The instrument was introduced following an application by Rope And Chain Company on 21 May 2008, and it came into force on the same date. The instrument was gazetted on 8 August 2008 and no submissions were received in opposition to the concession. The policy objective is to facilitate the importation of these goods by eliminating customs duty, thereby benefiting importers who may apply for a refund of duty paid on imports since the effective date of the concession.
Scope and Application
The Customs Act 1901, specifically through its Part XVA, allows for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to individuals or entities seeking lower rates of customs duty on goods by applying for a TCO, provided the goods are not specified in section 269SJ of the Act, which lists goods ineligible for TCOs. The Act extends its application across the Commonwealth of Australia and mandates that the CEO must assess TCO applications against certain core criteria, including the non-existence of substitutable goods produced in Australia. In the case of Rope And Chain Company's application for a TCO on kiln chains, the CEO's decision to grant the concession hinged on the absence of equivalent products manufactured domestically. Once a TCO is made, it takes effect from the date the application was lodged, and it does not retroactively disadvantage any party, including importers who may benefit from duty refunds for goods imported since the effective date of the TCO. The legislation does not impose any new liabilities on persons beyond the Commonwealth, ensuring that existing rights are preserved.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0809061 under the Customs Act 1901 (the Act) allow for the creation of Tariff Concession Orders (TCOs) that reduce the rate of customs duty on certain goods. Specifically, section 269F permits an application to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods do not fall under the prohibitions listed in section 269SJ. If the CEO is satisfied that the application meets the core criteria set out in section 269C, they must make a written order, known as a TCO (subsection 269P(3)). This TCO then applies a prescribed lower rate of duty to the specified goods, as detailed in Schedule 4 to the Customs Tariff Act 1995. For instance, in this case, TCO No. 0809061 was issued on 8 August 2008, making the general duty rate of 5% on certain kiln chains free.
The Act imposes specific obligations on both the CEO and the applicants. The CEO is required to assess whether the application meets the core criteria, which includes verifying that no substitutable goods are produced in Australia on the date the application was lodged (section 269C). Once satisfied, the CEO must issue a written TCO (subsection 269P(3)). The applicant, such as Rope And Chain Company, must ensure their application is valid and includes all necessary details to allow the CEO to make an informed decision. Additionally, the CEO must publish a notice in the Gazette inviting any submissions against the TCO (subsection 269K(1)), although no submissions were received in this case.
Failure to comply with the requirements of the Act can lead to various consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs regulations generally can result in civil or criminal penalties. Under the Customs Act 1901, the potential penalties for non-compliance can include fines and imprisonment, depending on the severity of the breach. For instance, knowingly making a false statement in an application could result in a fine of up to 10,000 penalty units or imprisonment for up to five years, or both, under section 276. Additionally, the CEO has the authority to impose administrative penalties for non-compliance with customs requirements, which can also include fines.
In this specific case, the TCO does not affect the rights of any person adversely as it does not impose any new liabilities and does not disadvantage anyone. Importers of the specified goods can apply for a refund of any duty paid since the TCO came into force on 21 May 2008, under paragraph 126(1)(r) of the Regulations. This provision ensures that the benefits of the reduced duty rate are passed on to the importers without retroactive imposition of liabilities.