EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0811404
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.
Govan Industries Pty Ltd applied for a TCO in respect of certain metal junction boxes casings on 05 June 2008.
Instrument
TCO No 0811404 was made on 15 August 2008. It declares that those certain metal junction boxes casings 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. 0811404 is taken to have come into force on 05 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 Tariff Concession Instrument No. 0811404 was enacted in 2008 as an amendment to the Customs Act 1901. This instrument was introduced to address the need for tariff concessions on specific goods, allowing for a lower rate of customs duty on those goods, thereby facilitating trade and potentially reducing costs for businesses. The instrument is part of the broader framework provided by the Customs Act, under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) for goods that meet certain criteria, such as the absence of substitutable goods produced in Australia.
The enacting body for this instrument is the Chief Executive Officer of Customs, operating under the authority granted by the Customs Act. The policy objective behind this legislation is to provide tariff relief for specified goods, in this case, certain metal junction boxes casings, by allowing for a free rate of duty instead of the general 5% rate, which can benefit importers and potentially lower costs for consumers. This instrument aims to streamline trade processes and support economic activities by reducing customs duty burdens on certain imported goods.
Scope and Application
The Tariff Concession Instrument No. 0811404, made under the Customs Act 1901, applies to the specific goods identified by Govan Industries Pty Ltd, namely certain metal junction boxes casings, and pertains to the imposition of customs duty on these goods. This instrument was created to address a particular case where the Chief Executive Officer of Customs determined that these goods were not being produced in Australia and therefore qualified for a lower tariff rate. This concession applies to the goods specified in the application, which are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument affects the import duties on these goods, with the general rate of duty being reduced to free under the terms of this order. The application and subsequent order are effective from the date the application was lodged, which is 05 June 2008, and no submissions were received opposing the concession. The legislation does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person.
Key Provisions
The main operative sections of the Customs Act 1901, specifically in relation to Tariff Concession Orders (TCOs), are sections 269F, 269C, and 269P(3) (Section 269F). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the application meets the core criteria, which includes the condition that no substitutable goods are produced in Australia on the day the application was lodged, the CEO must make a written order (Section 269C). If the CEO is satisfied that the application meets the core criteria, they must declare the goods as being subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, effectively reducing the rate of duty for those goods (Section 269P(3)).
The obligations imposed on the parties by this Act include the requirement for the CEO to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (Subsection 269K(1)). This ensures that all relevant stakeholders have the opportunity to voice their concerns before the TCO is implemented. Furthermore, TCOs are designed to be effective from the date the application is lodged, which means they can provide immediate benefits to the rights of importers (Subsection 269S(1)). Importers can apply for a refund of duty on goods imported since the TCO is deemed to have come into force, under paragraph 126(1)(r) of the Regulations.
Offences, penalties, or consequences for breach of the Act are not explicitly detailed in the provided text. However, the Act's framework suggests that failure to comply with the TCO provisions or improper application could result in legal consequences. For instance, if a TCO application is made for goods that should not qualify, or if there is fraud involved in the application process, it may lead to criminal charges or civil penalties. While specific penalties are not mentioned, breaches of customs regulations can generally result in fines or imprisonment, depending on the severity and intent of the violation. The Act’s provisions are designed to ensure that the concessions are granted fairly and in accordance with the stipulated criteria, thereby protecting the integrity of the customs duty system.