EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0814604
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.
Brisbane City Council applied for a TCO in respect of certain under bridge inspection maintenance unit on 25 June 2008.
Instrument
TCO No 0814604 was made on 12 September 2008. It declares that those certain under bridge inspection maintenance unit 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. 0814604 is taken to have come into force on 25 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. 0814604, enacted in 2008, is a specific measure under the Customs Act 1901 designed to address the need for tariff concessions on certain imported goods. This legislation allows for the application of reduced customs duty rates on specified goods, facilitating more cost-effective importation and use of these items in Australia. The instrument was introduced by the Chief Executive Officer of Customs in response to a valid application from the Brisbane City Council for tariff concessions on under bridge inspection maintenance units, effective from 25 June 2008. The policy objective here is to ensure that essential goods not produced domestically are accessible at a lower cost, thereby supporting economic efficiency and facilitating the importation of necessary equipment without undue financial burden. This instrument ensures that no person other than the Commonwealth is disadvantaged by the concession, and it provides a pathway for importers to seek refunds for duties paid before the concession was applied.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0814604, applies to the process of obtaining tariff concessions for specific goods, particularly those that are not produced domestically and thus meet the criteria for lower customs duty rates. This instrument pertains to any entity or individual, such as the Brisbane City Council in this case, who applies for a Tariff Concession Order (TCO) on behalf of goods that are not manufactured in Australia. The legislation allows for the Chief Executive Officer of Customs to grant such concessions if no substitutable goods are produced in Australia. This act applies nationally within the Commonwealth of Australia, providing a streamlined process for importing goods with reduced customs duties.
The application of this Act is limited to goods specified in section 269SJ of the Customs Act 1901, which excludes certain goods from being eligible for tariff concessions. This exclusion is intended to protect domestic industries by preventing the concession of lower duty rates on goods that could be produced locally. The Act does not impose any new liabilities on persons other than the Commonwealth and does not disadvantage any individual or entity by affecting their rights as at the date of the TCO registration. The instrument becomes effective from the date the application is lodged, as per subsection 269S(1) of the Act, ensuring that the tariff concessions apply retroactively to the date of application, thereby potentially entitling importers to refunds of duties paid on the specified goods.
Key Provisions
The Customs Act 1901 provides a framework through which Tariff Concession Orders (TCOs) can be made, allowing for reduced customs duty rates on specified goods (s 269F). A TCO application can be submitted by any person, but it must not be for goods specified in section 269SJ of the Act, which includes certain goods that are not eligible for a TCO. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria under section 269C, they are required to make a written order declaring the goods subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, resulting in a reduced duty rate (s 269P(3)). In this instance, the CEO determined that the application for a TCO on certain under bridge inspection maintenance units met the core criteria, and TCO No. 0814604 was issued on 12 September 2008, setting the duty rate for these goods at zero percent.
The obligations imposed by the Act on the parties involved include the requirement for the CEO to assess TCO applications against the core criteria. Specifically, the CEO must ensure that no substitutable goods are produced in Australia on the date the application is lodged, as defined by sections 269C, 269D, 269E and 269F. In the case of TCO No. 0814604, the CEO needed to verify that the under bridge inspection maintenance units could not be substituted by any goods produced in Australia that could serve the same purpose. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might have reasons to oppose the TCO, as mandated by section 269K(1). No submissions were received in response to the notice for this TCO.
There are no specific offences, penalties, or consequences outlined in the explanatory statement for the failure to comply with the requirements of a TCO. However, the Act generally imposes penalties for breaches of customs laws, which could include fines and imprisonment. The maximum penalties would depend on the nature and severity of the breach, as outlined in other sections of the Customs Act 1901 and related regulations. For instance, section 237 of the Act provides that a person found guilty of an offence against the Act is liable to a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both, for serious offences. In the context of TCOs, failure to comply with the terms of the concession could result in the loss of the tariff concession and potentially lead to the imposition of the full duty rate on the goods.