EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0830752
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.
Vesco Plastics (Australia) Pty Ltd applied for a TCO in respect of certain bushing stock tubes on 10 September 2008.
Instrument
TCO No 0830752 was made on 05 December 2008. It declares that those certain bushing stock tubes 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. 0830752 is taken to have come into force on 10 September 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 for the imposition of customs duty on goods entering the country. The Act allows for the creation of Tariff Concession Orders (TCOs) to provide duty concessions on certain goods, subject to specific criteria. The Tariff Concession Instrument No. 0830752, enacted in 2008, addresses the need to provide tariff concessions to ensure that Australian industries remain competitive and that consumers benefit from reduced costs on specific goods. This instrument was introduced to provide a lower rate of customs duty on certain bushing stock tubes, responding to an application from Vesco Plastics (Australia) Pty Ltd. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia for these tubes, thereby meeting the core criteria for a TCO. The instrument came into force on the date the application was lodged, without affecting existing rights or imposing new liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Orders (TCOs) under Part XVA, applies to goods imported into Australia where a TCO has been made by the Chief Executive Officer of Customs (CEO). A TCO is applicable when an entity, such as Vesco Plastics (Australia) Pty Ltd, applies for and the CEO determines that a lower rate of customs duty can be applied to certain goods, provided no substitutable goods are produced in Australia in the ordinary course of business. The scope of the Act is national, and it applies to all entities involved in importing the specified goods into Australia. The Act extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the prescribed duty rates. There are exclusions for goods listed in section 269SJ of the Act, which cannot be subject to a TCO. The application of a TCO benefits importers by potentially allowing them to claim refunds for duties paid on the specified goods since the effective date of the TCO, which is the date the application was lodged. The TCO does not impose any liabilities on any person and does not affect the rights of persons as at the date of registration in a manner that would disadvantage them.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0830752 under the Customs Act 1901 (section 269F) concern the application process for Tariff Concession Orders (TCO) and the criteria that must be met for such an order to be granted. An application for a TCO can be made by any person to the Chief Executive Officer (CEO) of Customs, who will then determine if the application meets the core criteria as outlined in section 269C. If the application does not pertain to goods specified in section 269SJ, which lists goods that cannot be subject to a TCO, and if the CEO is satisfied that no substitutable goods were produced in Australia at the time of the application, the CEO must make a written order declaring that the goods in question are subject to the concession (section 269P(3)).
The obligations imposed by this legislation require the CEO to assess whether an application meets the core criteria for a TCO. This includes verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who believe there are reasons why the TCO should not be granted, as stipulated in subsection 269K(1). The CEO is mandated to consider these submissions if any are made. The TCO in question, No. 0830752, was made on 5 December 2008, and it applies to certain bushing stock tubes, reducing the duty rate from 5% to free, as the CEO was satisfied that no substitutable goods were being produced in Australia at the time.
In terms of offences, penalties, or consequences for breach, the Customs Act 1901 does not explicitly detail specific penalties for failing to comply with the TCO provisions within the explanatory statement provided. However, non-compliance with customs regulations generally could lead to civil or criminal penalties under other sections of the Customs Act. For instance, knowingly making a false statement or representation to obtain a concession could result in penalties under sections related to false statements or fraudulent conduct. The consequences could include fines or imprisonment, depending on the severity and intent behind the breach.
Given the specific nature of TCO No. 0830752, the legislation ensures that the rights of parties other than the Commonwealth are not adversely affected by the concession. This means that any person who imported the specified goods prior to the TCO coming into force on 10 September 2008 is not subject to any liabilities or disadvantages as a result of the concession. Importers, however, benefit from the concession by being able to apply for a refund of duty on goods imported since the TCO is taken to have come into force, as outlined in paragraph 126(1)(r) of the Regulations.