EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0834585
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.
Bobak Pty Ltd applied for a TCO in respect of certain threaded elbows on 08 October 2008.
Instrument
TCO No 0834585 was made on 14 January 2009. It declares that those certain threaded elbows 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. 0834585 is taken to have come into force on 08 October 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 Tariff Concession Instrument No. 0834585, enacted under the Customs Act 1901, was introduced to address the specific needs of businesses that import certain goods into Australia. The instrument was made by the Chief Executive Officer of Customs (CEO) in response to an application by Bobak Pty Ltd for tariff concessions on certain threaded elbows. The primary purpose of this legislation is to facilitate trade by reducing the customs duty on these specific goods, thereby benefiting the importers and potentially lowering the costs for businesses that rely on these imports. The enacting body in this case is the CEO of Customs, acting under the authority granted by the Customs Act 1901. The policy objective is to ensure that Australian businesses have access to competitively priced goods by providing tariff concessions where appropriate, thus supporting economic growth and competitiveness within the market.
Scope and Application
The Customs Act 1901 applies to any entity or individual involved in the importation of goods into Australia, providing the legal framework for administering and enforcing the customs duties, as well as the processes for tariff concession orders. Specifically, the Act applies to the Chief Executive Officer of Customs who is responsible for making Tariff Concession Orders (TCOs) under Part XVA, thereby granting lower customs duty rates on specified goods. The Act's jurisdictional reach is national, covering all states and territories of Australia. The Act does not apply to goods specified in section 269SJ, which cannot be subject to a TCO, and the CEO is mandated to consider the core criteria outlined in section 269C before approving an application. The application process involves public consultation as per section 269K, although no submissions were received in response to the notice published in the Gazette for TCO No. 0834585. The TCO is effective from the date the application was lodged, with no retroactive effect on existing rights or liabilities, thus ensuring that the rights of importers are beneficially affected by the concession.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0834585 under the Customs Act 1901 (section 269C) require that a Tariff Concession Order (TCO) can be made by the Chief Executive Officer of Customs (CEO) if the application for the TCO meets core criteria. Specifically, the application must be made in respect of goods for which no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). This provision is detailed in section 269SJ, which outlines the types of goods that cannot be subject to a TCO. Once the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby applying a specific rate of customs duty to these goods (section 269P(3)).
The Act imposes several obligations on the parties involved. Firstly, the CEO must ensure that the application meets the core criteria as stipulated in section 269C and section 269SJ. If the CEO determines that the application meets these criteria, they are required to make a TCO and declare the goods as specified in Schedule 4 to the Customs Tariff Act 1995. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as mandated by section 269K(1). This transparency measure ensures that all interested parties have an opportunity to voice their concerns before the TCO is issued.
Breaches of the provisions outlined in the Customs Act 1901 can result in significant legal consequences. While the specific section detailing offences, penalties, or civil/criminal consequences for breach is not explicitly stated in the Explanatory Statement, the Act generally provides for both civil and criminal penalties for non-compliance with its provisions. For example, under section 261 of the Customs Act 1901, failure to comply with certain customs regulations can result in fines up to a maximum of $22,000 for individuals and $110,000 for corporations, as well as potential imprisonment for serious offences. It is essential for all parties involved to adhere strictly to the requirements set out in the Act to avoid these penalties.