EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0828162
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.
Scf Containers Pty Ltd applied for a TCO in respect of certain transportable prefabricated buildings on 27 August 2008.
Instrument
TCO No 0828162 was made on 21 November 2008. It declares that those certain transportable prefabricated buildings 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. 0828162 is taken to have come into force on 27 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 was amended to include the Tariff Concession Instrument No. 0828162, enacted in 2008, which addresses the need for concessional tariffs on specific goods that are not produced domestically. This instrument was introduced to facilitate the importation of certain transportable prefabricated buildings by Scf Containers Pty Ltd, ensuring that these goods receive a tariff concession. The instrument was developed under the authority of the Chief Executive Officer of Customs (CEO) who, upon determining that no substitutable goods were produced in Australia, issued the concession. The CEO is mandated to consider applications for such tariff concessions under section 269F of the Act, and if the core criteria are met, the CEO issues a Tariff Concession Order (TCO) as outlined in section 269P(3). This TCO, effective from the date of application on 27 August 2008, stipulates that the affected goods are subject to a zero rate of customs duty, which contrasts with the general rate of 5%. The process includes mandatory public consultation as per subsection 269K(1) of the Act, although no submissions were received for this particular TCO. The policy objective is to support the importation of non-domestically produced goods, thereby benefiting importers by potentially allowing duty refunds for goods imported since the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 0828162 is a legislative measure under Part XVA of the Customs Act 1901, which allows for the application of lower customs duty rates on specific goods through Tariff Concession Orders (TCOs). This Act applies to individuals or entities, such as Scf Containers Pty Ltd in this case, that seek a TCO for goods that are not produced in Australia and for which no suitable substitutes are available domestically. The application process requires that the Chief Executive Officer of Customs (CEO) be satisfied that the goods in question meet the core criteria outlined in the Act, primarily that no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this Act is national, applying to all imports into Australia. The Act does not specify any exclusions or exemptions, except for the goods listed in section 269SJ, which cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, though this particular TCO does not impose any liabilities and benefits importers by allowing them to apply for a refund of duty on goods imported since the day the TCO came into force.
Key Provisions
The primary operative sections of this legislation pertain to the making of Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). A person may apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria outlined in sections 269C, 269B, and 269D, they must make a written order (section 269P(3)). TCO No. 0828162, declared on 21 November 2008, applies to certain transportable prefabricated buildings, reducing the duty from 5% to free under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the CEO regarding the handling of TCO applications. The CEO must publish a notice in the Gazette inviting submissions from interested parties if the application is deemed valid (subsection 269K(1)). If no submissions are received, the CEO must proceed to decide on the application. Additionally, the CEO must ensure that any TCO does not disadvantage or impose liabilities on any person in respect of actions taken before the TCO's effective date (subsection 269S(1)). In the case of TCO No. 0828162, the CEO did not receive any submissions and ensured that the order would not affect the rights of persons adversely.
Breaches of the provisions set out in the Customs Act 1901 could result in various penalties and consequences. While the specific penalties for non-compliance with TCO regulations are not detailed in this explanatory statement, it is generally understood that failure to adhere to customs regulations can lead to both civil and criminal penalties. Civil penalties may include fines, while criminal penalties could involve imprisonment, depending on the severity of the breach and the specific provisions of the Customs Act 1901. The exact penalties would be determined based on the nature and extent of the violation.