EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0816637
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.
United Group Rail Serivces Pty Ltd applied for a TCO in respect of certain metal expansion joint bellows on 08 July 2008.
Instrument
TCO No 0816637 was made on 26 September 2008. It declares that those certain metal expansion joint bellows 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. 0816637 is taken to have come into force on 08 July 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. 0816637 was enacted under the Customs Act 1901, aimed at addressing the need for tariff concessions on specific goods. The instrument, which was issued by the Chief Executive Officer of Customs, provides a concession for certain metal expansion joint bellows by reducing the rate of duty from 5% to free. This was made possible because, on the day the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business, meeting the core criteria outlined in the Customs Act 1901. The instrument was published in the Gazette, inviting any objections, but none were received, allowing it to proceed. The tariff concession came into effect on the date the application was lodged, July 8, 2008, and provides benefits to importers by allowing them to apply for a refund of duty for goods imported since the commencement date without imposing any liabilities.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which reduce the rate of customs duty on specified goods. This Act applies to any person or entity that seeks to import goods into Australia and qualifies for a tariff concession under the specified conditions. The application of a TCO is contingent on the absence of substitutable goods being produced in Australia at the time the application is made, as defined in section 269D and 269E of the Act. The scope of the Act extends across the Commonwealth, as it involves federal customs regulations and tariffs. There are exclusions, such as goods listed in section 269SJ of the Act, which are not eligible for tariff concessions. The TCO No. 0816637, made on 26 September 2008, for instance, exempts certain metal expansion joint bellows from the usual 5% duty rate, setting it to free, provided the application met the core criteria. This particular TCO came into force on the date the application was lodged, 8 July 2008, and it does not retroactively affect the rights of any parties except the Commonwealth.
Key Provisions
The primary sections of the Customs Act 1901 that are relevant to the Tariff Concession Order (TCO) No. 0816637 include sections 269C, 269B, 269D, 269E, 269F, 269P, 269K, and 269S. Section 269F outlines the process for applying for a TCO, while section 269C stipulates the core criteria that must be met for an application to be considered valid. The definitions provided in sections 269B, 269D, and 269E are crucial in determining whether a TCO can be granted, particularly concerning the production of substitutable goods in Australia. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the criteria and no submissions are received opposing the TCO, the CEO must issue a written TCO as per section 269P. This process is further governed by sections 269K and 269S, which require the CEO to publish a notice in the Gazette and clarify the commencement date of the TCO.
The Act imposes several obligations on the parties involved in the TCO process. United Group Rail Services Pty Ltd, the applicant, must ensure that their application meets the core criteria as defined by the Act. This involves demonstrating that no substitutable goods were produced in Australia on the date the application was lodged. The CEO, on the other hand, has the responsibility of evaluating the application to determine whether it meets these criteria and subsequently issuing a written TCO if satisfied. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO, which was not received in this instance.
Failure to comply with the provisions of the Customs Act 1901 in relation to TCOs can result in various consequences. While specific offences and penalties are not detailed within the explanatory statement, non-compliance with the Act generally can lead to civil or criminal penalties. For instance, knowingly providing false or misleading information in an application could potentially result in fines or other legal repercussions. Additionally, any party that benefits improperly from a TCO may face financial penalties or be required to repay any duty that was incorrectly remitted. The exact penalties would depend on the specific nature and severity of the breach, as outlined in other parts of the Customs Act 1901 and related regulations.