EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0828681
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.
Unispan Australia Pty Ltd applied for a TCO in respect of certain scaffolding mesh on 28 August 2008.
Instrument
TCO No 0828681 was made on 19 February 2009. It declares that those certain scaffolding mesh 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. 0828681 is taken to have come into force on 28 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 Australian Parliament, provides a framework for the administration of customs and excise duties, including the ability to grant tariff concession orders (TCOs) under Part XVA. These TCOs allow for the application of lower rates of customs duty on specified goods, subject to certain criteria being met. The Tariff Concession Instrument No. 0828681, made under the authority of the Customs Act, was introduced to address the application by Unispan Australia Pty Ltd for tariff concessions on certain scaffolding mesh. The CEO of Customs determined that these goods qualified for the concession as no substitutable goods were produced in Australia at the time of the application, thereby reducing the duty rate from 5% to free. This legislative measure ensures that the rights of importers are protected and beneficially affected, allowing them to apply for duty refunds on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Order No. 0828681 under the Customs Act 1901 applies to certain scaffolding mesh that was the subject of an application by Unispan Australia Pty Ltd. This legislation is part of a broader scheme outlined in Part XVA of the Customs Act 1901, which allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that provide a lower rate of customs duty on specified goods. The application process requires that the goods in question are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. Moreover, the application must meet the core criteria set out in sections 269C and 269P, primarily that no substitutable goods were produced in Australia on the date the application was lodged. This TCO is effective from 28 August 2008, the date the application was lodged, and it grants a duty-free status to the specified scaffolding mesh, whereas the general rate of duty on these goods is 5%. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on such persons. Importers of the goods can benefit from this TCO by applying for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901 (section 269F) allows for the application of a Tariff Concession Order (TCO) which reduces the rate of customs duty on certain goods. An application for a TCO can be made by any person, provided that the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for a TCO. The Chief Executive Officer of Customs (CEO) must then determine if the application meets the core criteria set out in section 269C, which requires that, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are met, a TCO is issued under section 269P(3), declaring that the goods in question are subject to a prescribed rate in Schedule 4 of the Customs Tariff Act 1995.
Under the Act, entities and individuals must adhere to the provisions that govern the application and issuance of TCOs. For instance, section 269B and section 269E require that the definitions of 'goods produced in Australia' and 'ordinary course of business' be considered when evaluating an application. The CEO is mandated to publish a notice in the Gazette (subsection 269K(1)) inviting submissions from interested parties after accepting a TCO application as valid. This ensures transparency and allows stakeholders to voice any concerns regarding the potential concession. Once the application meets the core criteria and no objections are raised, a TCO is issued, and the concession becomes effective from the date the application was lodged (subsection 269S(1)).
Breaching the provisions of the Customs Act 1901 related to TCOs can lead to various consequences. While the explanatory statement does not explicitly list offences or penalties, it is implied that failure to comply with the Act's requirements could result in legal action. The consequences might include financial penalties, legal disputes, or other enforcement actions as per the broader provisions of the Customs Act. The exact penalties for non-compliance would be determined based on the specific breach and the applicable sections of the Act.
Overall, the Customs Act 1901 facilitates a structured process for applying and granting TCOs, ensuring that only eligible goods benefit from reduced customs duty rates. The act's provisions aim to balance the interests of various stakeholders, including the government, producers, and importers, by providing a transparent and fair mechanism for tariff concessions.