EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0813999
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.
Onesteel Wire Pty Ltd applied for a TCO in respect of certain gripple tool on 23 June 2008.
Instrument
TCO No 0813999 was made on 12 September 2008. It declares that those certain gripple tool 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. 0813999 is taken to have come into force on 23 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 Parliament of Australia to regulate the import and export of goods and to provide for the collection of customs duty. One of its provisions, specifically Part XVA, allows for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) which can reduce the rate of customs duty on certain goods. The problem this legislative instrument addresses is the facilitation of trade by providing lower customs duty rates on goods that are not produced domestically, thereby encouraging the import of these goods into Australia. Tariff Concession Instrument No. 0813999, made on 12 September 2008, is an example of such an order, declaring that certain gripple tools are subject to a zero per cent duty rate instead of the usual 5 per cent. The policy objective is to ensure that importers benefit from the tariff concessions without any retrospective disadvantage or imposition of new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0813999 under the Customs Act 1901 applies specifically to the concession of tariff duties on certain gripple tools, as applied for by Onesteel Wire Pty Ltd. This instrument is applicable to the goods specified in the application, which in this instance are certain gripple tools. The instrument is part of a broader scheme under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) to lower the rate of customs duty on goods, provided they meet the core criteria outlined in the Act. These criteria include the absence of substitutable goods produced in Australia at the time of the application. The geographic reach of this legislation is national, operating within the framework of Australian customs law. The Act applies to any person or entity that imports the specified goods and seeks a tariff concession, and it is subject to the conditions and exceptions specified within the Customs Act 1901 and the Customs Tariff Act 1995. This instrument does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person for actions taken before its registration.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0813999 under the Customs Act 1901 (section 269C) establish a mechanism for the Chief Executive Officer of Customs (CEO) to reduce customs duty rates on specific goods, provided certain criteria are met. The instrument declares that certain gripple tools are subject to a lower rate of duty, specifically free of charge, as opposed to the general rate of 5% (section 269P(3)). To qualify, the goods must not have substitutable equivalents produced in Australia, which means there must be no locally produced goods that can serve the same purpose (section 269D, 269E, 269F). This concession took effect from the date the application was lodged, 23 June 2008 (subsection 269S(1)).
The obligations imposed by the Act on the parties involved are primarily on the CEO, who must assess whether an application meets the core criteria before issuing a Tariff Concession Order (TCO). The CEO must also publish a notice in the Gazette inviting submissions from interested parties if the application is accepted as valid (subsection 269K(1)). In this instance, the CEO did not receive any submissions opposing the TCO. Additionally, the CEO must ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose new liabilities on individuals for actions taken before the TCO's effective date.
Failure to comply with the requirements set out in the Customs Act 1901 can lead to various consequences. While the specific offences and penalties are not detailed in the explanatory statement, breaches of customs regulations generally can result in civil or criminal penalties. Civil penalties may include fines, while criminal penalties can involve imprisonment, depending on the severity of the breach. The maximum penalties for breaches of customs laws are specified in other sections of the Act and related regulations, but they are not explicitly mentioned in this particular explanatory statement.