EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0826255
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.
Australian Hose & Fittings applied for a TCO in respect of certain hydraulic steel hose tails on 13 August 2008.
Instrument
TCO No 0826255 was made on 31 October 2008. It declares that those certain hydraulic steel hose tails 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. 0826255 is taken to have come into force on 13 August 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 Parliament of Australia, introduced a framework within which Tariff Concession Orders (TCOs) could be made by the Chief Executive Officer of Customs. This legislative instrument aimed to address the need for a streamlined process to provide tariff concessions on specific goods, thus encouraging trade and economic efficiency. The Act enables the CEO to reduce the customs duty on goods when certain criteria are met, particularly when no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0826255 exemplifies this mechanism, as it was created in response to an application from Australian Hose & Fittings for tariff concessions on certain hydraulic steel hose tails, effectively setting the duty rate at free instead of the general rate of 5%. This order aligns with the policy objective of supporting Australian industries by ensuring they remain competitive in the global market.
Scope and Application
The Tariff Concession Instrument No. 0826255 under the Customs Act 1901 applies to Australian Hose & Fittings, which sought a tariff concession order (TCO) for certain hydraulic steel hose tails. The Act facilitates the reduction of customs duty on specified goods through the issuance of TCOs by the Chief Executive Officer of Customs (CEO). The instrument is applicable to goods that are not substitutable with any produced in Australia, as per the core criteria outlined in section 269C of the Act. The CEO must be satisfied that the application meets these criteria, and in this case, the CEO found that no substitutable goods were produced in Australia. The TCO applies to the goods specified in the instrument, which are now subject to a rate of duty of free, as opposed to the general rate of 5%. The geographic and jurisdictional reach of this Act is nationwide, affecting all entities involved in the importation of the specified goods across Australia. The Act does not specify any exclusions, exemptions, or thresholds other than the criteria that the goods must not be substitutable with any produced in Australia. The Act allows for the extension of its application through subordinate instruments, which may provide further detail or specific conditions regarding the concession.
Key Provisions
The primary sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 0826255, pertain to Tariff Concession Orders (TCOs). Section 269F (2) allows for the application to the Chief Executive Officer of Customs (CEO) for a TCO regarding specific goods. If the CEO determines that the application is valid and the goods do not fall under the prohibitions listed in section 269SJ, the CEO must assess whether the application meets the core criteria outlined in section 269C. The core criteria require that no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269D and 269E. If these criteria are met, the CEO must issue a TCO, which is documented in section 269P(3). The TCO specifies that the goods in question are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995, which may result in a concessional rate of customs duty.
The Act imposes certain obligations on the parties involved. An applicant, such as Australian Hose & Fittings in this case, must ensure their application is thorough and meets the criteria outlined in the Act. The CEO is mandated to review the application, assess whether the goods qualify for a TCO, and publish a notice in the Gazette inviting any objections (subsection 269K(1)). The CEO must also consider any submissions received in response to the notice. If the CEO is satisfied that the application meets the core criteria, they must issue the TCO, as seen in the case of TCO No. 0826255.
Section 269S(1) of the Act specifies that a TCO comes into force on the date the application is lodged. Therefore, TCO No. 0826255 is effective from 13 August 2008. This means that from this date, the specified hydraulic steel hose tails are subject to the reduced duty rate of zero, as opposed to the general rate of 5%. The TCO does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth, ensuring that the rights of importers are beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers can apply for a refund of duty on goods imported since the TCO's effective date.
Failure to comply with the provisions of the Act or the TCO could result in various consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs regulations generally attract civil and criminal penalties. For instance, importing goods without the appropriate duty paid could lead to fines or imprisonment, depending on the severity and intent behind the breach. The maximum penalties are not specified in the explanatory statement but are typically outlined in other sections of the Customs Act 1901 or related legislation. Non-compliance could also result in additional administrative actions by Customs, including the seizure of goods and further financial liabilities.