EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0811232
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.
Mitsui & Co Ltd applied for a TCO in respect of certain ship to ship boat or dock fenders on 03 June 2008.
Instrument
TCO No 0811232 was made on 02 September 2008. It declares that those certain ship to ship boat or dock fenders 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. 0811232 is taken to have come into force on 03 June 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 a framework for administering customs and excise duties. The Act was updated to include a scheme under which Tariff Concession Orders (TCOs) can be made, reducing customs duty on certain goods. Specifically, this legislation aims to address the problem of high customs duties on goods that are not produced domestically and for which there are no substitutable Australian-made alternatives. By allowing the Chief Executive Officer of Customs to grant tariff concessions, the Act seeks to promote competitive pricing and availability of certain imported goods in the Australian market. The explanatory statement for Tariff Concession Instrument No. 0811232, made on 02 September 2008, details the application and approval process for a TCO for certain ship-to-ship boat or dock fenders, reducing their duty rate from 5% to free. This instrument was introduced without any objections from the public, aligning with the policy objective of facilitating trade and economic efficiency.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0811232, pertains to the process of applying for and granting Tariff Concession Orders (TCOs) for specific goods entering Australia. This legislation applies to any individual or entity seeking to import goods that qualify for a lower rate of customs duty than the standard rate. The scope of the Act is confined to the Commonwealth level and is specifically targeted at goods that are not produced domestically in the ordinary course of business, as per the criteria outlined in sections 269C and 269SJ of the Act. The Act's jurisdiction extends to the entire Commonwealth of Australia, and it does not impose any liabilities on any person as a result of the application of a TCO, while potentially benefiting importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force on the date of the application, as specified in paragraph 126(1)(r) of the Regulations. The Act allows for the CEO to extend or restrict the application through subordinate instruments, as necessary, ensuring the smooth implementation of the tariff concession scheme.
Key Provisions
The Customs Act 1901, specifically under Part XVA, provides the framework for Tariff Concession Orders (TCOs) that allow for a lower rate of customs duty on certain goods. Section 269F of the Act allows for the application to the Chief Executive Officer of Customs (CEO) for a TCO regarding specific goods. If the application does not pertain to goods specified in section 269SJ, which are ineligible for TCOs, the CEO evaluates the application against the core criteria outlined in section 269C. This core criterion requires that, on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are detailed in sections 269D, 269E, and 269F respectively. If the application meets these criteria, the CEO must issue a written TCO under section 269P(3), which declares that the specified goods will apply to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, thereby setting a new duty rate for these goods.
Entities or individuals applying for a TCO must ensure their applications meet the core criteria as defined in section 269C. They must provide sufficient evidence to demonstrate that no substitutable goods are produced in Australia at the time of application. The CEO, upon reviewing the application, must satisfy themselves that the application aligns with the legislative criteria before issuing the TCO. Additionally, as per section 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who might have reasons to oppose the TCO. Any submissions received must be considered before the final decision is made. In the case of TCO No. 0811232, no submissions were received, leading to the CEO's decision to issue the TCO for ship-to-ship boat or dock fenders, setting their duty rate at free.
Failure to comply with the requirements set out in the Customs Act 1901 and associated regulations can lead to various consequences. The Act does not explicitly detail specific offences or penalties for non-compliance with TCOs; however, general provisions within the Customs Act and other relevant legislation may apply. These can include fines or other penalties for misrepresentation, failure to provide necessary information, or other breaches of customs regulations. The specific penalties would depend on the nature and severity of the breach but could include substantial financial penalties, prosecution, or both. It is essential for applicants and entities affected by TCOs to ensure they fully comply with all legislative requirements to avoid these potential consequences.