EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0812464
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.
ACI Operations Pty Ltd applied for a TCO in respect of certain neck rings and or bottom plates on 12 June 2008.
Instrument
TCO No 0812464 was made on 15 August 2008. It declares that those certain neck rings and or bottom plates 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. 0812464 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 was enacted by the Australian Parliament to regulate the importation and exportation of goods in Australia, including the collection of customs duties and other charges. A significant aspect of the Customs Act is the provision for Tariff Concession Orders (TCOs), which can reduce or eliminate customs duties on certain imported goods. Enacted in 1901, the Customs Act has been amended numerous times, including the introduction of Part XVA, which facilitates the establishment of TCOs by the Chief Executive Officer of Customs. The policy objective behind TCOs is to promote economic efficiency and competitiveness by allowing for tariff reductions on goods that are not produced in Australia or for which there are no suitable Australian-made substitutes. The explanatory statement for Instrument No. 0812464, issued under the Customs Act, exemplifies the practical application of this mechanism, where a TCO was granted to ACI Operations Pty Ltd for certain neck rings and bottom plates, resulting in a tariff reduction from 5% to free, effective from the date of the application.
Scope and Application
The Tariff Concession Instrument No. 0812464 pertains to the Customs Act 1901 and its application to Tariff Concession Orders (TCOs), which are mechanisms to grant lower rates of customs duty on specified goods. This legislation applies to any person or entity seeking to import goods that may benefit from tariff concessions, provided that such goods are not listed in section 269SJ of the Act, which prohibits certain goods from being subject to a TCO. The instrument is specifically concerned with the application made by ACI Operations Pty Ltd for certain neck rings and bottom plates, and it applies across the Commonwealth of Australia. The instrument does not disadvantage any person by affecting their rights as they stood on the date of registration, nor does it impose liabilities on any person other than the Commonwealth. The rights of importers are advantageously affected as they can apply for a refund of duty on goods imported since the date the TCO is taken to have come into force. Subordinate instruments may further extend or define the application of this Act, although no such instruments are mentioned in the provided text.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0812464, under the Customs Act 1901, involve the process and criteria for making a Tariff Concession Order (TCO). Specifically, section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods (s. 269F). If the CEO is satisfied that the application meets the core criteria set out in section 269C, which includes the requirement that no substitutable goods are produced in Australia (s. 269C), they must make a written order declaring the goods to which the concession applies (s. 269P(3)). This instrument, TCO No. 0812464, declares that certain neck rings and bottom plates are subject to a TCO, thereby applying a rate of duty of free, as opposed to the general rate of 5% (s. 269P(3)).
The obligations imposed by the Act on the parties governed by it are primarily on the CEO of Customs. The CEO must first ensure that the application for a TCO does not pertain to goods specified in section 269SJ of the Act, which are ineligible for a TCO (s. 269SJ). The CEO then needs to determine if the application meets the core criteria, particularly if no substitutable goods are produced in Australia on the day the application was lodged (s. 269C). Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any person to lodge a submission if they believe the TCO should not be made (s. 269K(1)). In this case, no submissions were received.
Regarding potential offences and penalties for breach, the Act does not specify detailed criminal or civil consequences for non-compliance with the TCO process itself. However, it is implied that any misuse of the TCO or fraud in the application process could lead to legal consequences under the broader Customs Act 1901. The penalties for breaches of the Customs Act can include substantial fines and imprisonment, depending on the severity of the offence. For instance, section 236 of the Act allows for penalties of up to $22,200 or imprisonment for five years, or both, for offences such as fraudulent attempts to evade duty. The specific penalties would depend on the nature and extent of the breach.