EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0833370
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.
Bedrock International Pty Ltd applied for a TCO in respect of certain resin rocks on 30 September 2008.
Instrument
TCO No 0833370 was made on 12 December 2008. It declares that those certain resin rocks 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. 0833370 is taken to have come into force on 30 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 Parliament of Australia, provides a framework for the administration of customs and excise duties, including the authority for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) under section 269F. These orders can reduce customs duty rates on specific goods if certain conditions are met, primarily that no substitutable goods are produced in Australia as per section 269C. The policy objective is to facilitate trade by reducing the cost of imported goods, provided they are not replaceable by locally produced alternatives. This measure helps in promoting economic efficiency and competitiveness in the market. The Customs Act 1901, through its provisions, aims to address the gap in providing tariff relief where it can stimulate trade and industry without disadvantaging local production.
Scope and Application
The Tariff Concession Instrument No. 0833370 under the Customs Act 1901 applies to the specific category of resin rocks for which Bedrock International Pty Ltd made an application for a Tariff Concession Order (TCO). The instrument is applicable to any person or entity involved in the importation of these resin rocks, providing them with a tariff concession that reduces the customs duty from the general rate of 5% to a free rate, as long as the TCO criteria are met. The geographic reach of this Act is national, as it pertains to customs duties within Australia, and it extends to all resin rocks that meet the specified criteria, irrespective of where they are produced or imported from. The Act does not extend to goods that are explicitly prohibited from being subject to a TCO under section 269SJ of the Customs Act 1901, which includes goods that are substitutable with those produced in Australia in the ordinary course of business. The application of the Act may be further defined or restricted through subordinate instruments, although this specific TCO does not introduce new exclusions or exemptions beyond those already outlined in the primary legislation.
Key Provisions
Section 269F of the Customs Act 1901 provides the process by which a person may apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). If the application is not for goods specified in section 269SJ of the Act, the CEO must determine if it meets the core criteria set out in section 269C. This involves verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the application satisfies these criteria, the CEO must issue a written TCO (section 269P(3)) indicating the prescribed tariff item from Schedule 4 to the Customs Tariff Act 1995 that applies to the goods. This order, for example, was issued for certain resin rocks, where the rate of duty was reduced from the general rate of 5% to free, as specified in TCO No. 0833370.
The obligations under the Customs Act 1901 for the CEO include accepting valid TCO applications, ensuring that the core criteria are met, and making a written order if these criteria are satisfied. The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). In the case of TCO No. 0833370, no submissions were received in response to this invitation. Additionally, the CEO must ensure that the TCO does not adversely affect the rights of any person as at the date of registration, except in cases where it beneficially affects the rights of importers, allowing them to apply for a refund of duty on goods imported since the TCO came into force.
Breaching the provisions of the Customs Act 1901 can result in both civil and criminal consequences. Under section 280 of the Act, any person who knowingly or recklessly makes a false or misleading statement in an application for a TCO may be guilty of an offence. The maximum penalty for this offence is 10,000 penalty units or imprisonment for five years, or both, reflecting the seriousness of providing false information to the CEO. Additionally, any person who fails to comply with the terms of a TCO may also face penalties, although the specific consequences are not detailed in the explanatory statement. These provisions ensure that the integrity of the tariff concession scheme is maintained and that any misuse is appropriately sanctioned.