EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0812249
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.
I H I Engineering Australia Pty Ltd applied for a TCO in respect of certain cylindrical hoppers on 12 June 2008.
Instrument
TCO No 0812249 was made on 22 August 2008. It declares that those certain cylindrical hoppers 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. 0812249 is taken to have come into force on 12 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, established a framework for customs duties and tariffs, including provisions for Tariff Concession Orders (TCOs) under Part XVA. These orders allow for a lower rate of customs duty on specified goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The objective of this legislative scheme is to support Australian industries by reducing the cost of imported goods that have no local equivalent. The Tariff Concession Instrument No. 0812249, issued on 22 August 2008, applies a free rate of duty to certain cylindrical hoppers, as no substitutable goods were produced in Australia at the time of application. This instrument was introduced to benefit the applicant, I H I Engineering Australia Pty Ltd, by reducing their customs duty from 5% to free, thereby potentially lowering their import costs and making their products more competitive in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0812249, made under the Customs Act 1901, applies to a specific set of cylindrical hoppers for which I H I Engineering Australia Pty Ltd lodged an application on 12 June 2008. The instrument grants a tariff concession order (TCO) to these goods, reducing the applicable customs duty from the general rate of 5% to free, provided that no substitutable goods were produced in Australia at the time the application was made. The scope of the Act encompasses entities and individuals who apply for tariff concessions under section 269F and those affected by the concession, particularly importers who can benefit from the duty reduction and potentially claim refunds for duties paid prior to the TCO's effective date. The instrument's jurisdiction is federal, applying across Australia as per the Customs Act 1901. The application of the TCO is subject to certain exclusions, notably the goods specified in section 269SJ of the Act which cannot be subject to a TCO. The Act may extend its application through subordinate instruments, but this particular TCO is standalone and does not disadvantage any person or impose new liabilities on anyone, including the Commonwealth.
Key Provisions
The primary operative sections of the Customs Act 1901, as relevant to this Tariff Concession Order (TCO), are sections 269C, 269B, 269D, 269E, and 269P. Section 269C (3) mandates that the Chief Executive Officer of Customs (CEO) must consider whether an application for a TCO meets the core criteria, which are defined by sections 269B, 269D, and 269E. Section 269P(3) stipulates that if the application meets the criteria, the CEO must issue a written TCO, specifying the goods to which the prescribed tariff concession applies. In this case, the CEO issued TCO No. 0812249, declaring that certain cylindrical hoppers are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, thereby setting the duty rate at free instead of the general rate of 5%.
The Act imposes several obligations on the parties involved in the process. Firstly, any person or entity seeking a TCO must submit an application to the CEO, which must be in respect of goods not specified in section 269SJ. The CEO has a duty to review the application and determine whether it meets the core criteria as defined by sections 269B, 269D, and 269E. If satisfied, the CEO must issue a written TCO, as per section 269P(3). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be made, as required by subsection 269K(1). In this instance, the CEO did not receive any submissions in response to the published notice.
Failure to comply with the provisions of the Customs Act 1901 may result in various consequences. While the Explanatory Statement does not specify offences or penalties for breach, the Act generally provides for both civil and criminal penalties for non-compliance with customs regulations. For instance, knowingly making a false statement in a customs document can lead to a fine of up to $22,200 or imprisonment for up to two years, or both, under section 245 of the Act. Furthermore, contravening a TCO or any other provision of the Customs Act could result in similar penalties, depending on the severity of the breach.
In summary, the Tariff Concession Order No. 0812249, issued under the Customs Act 1901, establishes a lower customs duty rate for certain cylindrical hoppers, provided the core criteria are met. The CEO has the responsibility to review applications and issue TCOs accordingly. The Act imposes obligations on applicants and the CEO, including the duty to publish notices and consider submissions. Although specific penalties for breach are not outlined in the Explanatory Statement, the Act generally provides for civil and criminal penalties for non-compliance with customs regulations.