EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0836453
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.
Custom Coaches applied for a TCO in respect of certain square or rectangular tube on 22 October 2008.
Instrument
TCO No 0836453 was made on 27 February 2009. It declares that those certain square or rectangular tube 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. 0836453 is taken to have come into force on 22 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs). These orders, as outlined in Part XVA of the Act, enable the Chief Executive Officer of Customs to reduce or eliminate customs duty on certain imported goods under specific conditions. The primary problem this legislative framework addresses is the potential economic disadvantage faced by Australian businesses and consumers due to the absence of locally produced alternatives for certain goods, thereby encouraging fair competition and economic efficiency. The Tariff Concession Instrument No. 0836453, made under this Act on 27 February 2009, applies to specific square or rectangular tubes, granting them a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, effective from the date of the application, 22 October 2008. The policy objective of this instrument is to ensure that Australian importers are not disadvantaged by the absence of substitutable goods produced domestically, thereby promoting competitive and efficient market practices.
Scope and Application
The Tariff Concession Instrument No. 0836453 under the Customs Act 1901 applies to goods specified in the instrument, namely certain square or rectangular tubes, for which a Tariff Concession Order (TCO) has been granted. This TCO is applicable to any entity importing these specific goods into Australia, effectively reducing the customs duty on these goods from the general rate of 5% to zero. The instrument applies nationally across Australia as it falls under the jurisdiction of the Commonwealth. The Act does not impose any disadvantages or liabilities on individuals or entities other than the Commonwealth, and the rights of importers will be beneficially affected as they may apply for a refund of duty on goods imported since the effective date of the TCO. The application and concession do not extend to goods specified in section 269SJ of the Customs Act 1901, which lists goods that cannot be subject to a TCO. Any further application or restriction of this concession is subject to subordinate instruments which may be issued under the authority of the Act.
Key Provisions
The main operative sections of this legislation, specifically the Customs Act 1901 (the Act), include sections 269C, 269B, 269D, 269E, 269F, 269P, 269K, 269SJ, and 269S. These sections outline the process and criteria for applying for a Tariff Concession Order (TCO), including the conditions under which a TCO may be granted (sections 269C and 269F). If the Chief Executive Officer of Customs (the CEO) is satisfied that an application meets the core criteria, they must make a TCO (section 269P(3)). The CEO is required to publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)), and a TCO comes into force on the day the application is lodged (subsection 269S(1)). It is also important to note the definition of 'substitutable goods' and the exclusions outlined in section 269SJ.
The obligations and requirements imposed by the Act on the parties involved are primarily on the CEO and applicants. The CEO must evaluate whether an application meets the core criteria, specifically whether substitutable goods are produced in Australia (section 269C). If the application is deemed valid, the CEO must publish a notice in the Gazette and accept submissions if any are received (subsection 269K(1)). Once satisfied that the application meets all criteria, the CEO must make a TCO (section 269P(3)). Applicants must ensure their applications are in line with the criteria outlined in the Act, particularly ensuring that the goods in question are not substitutable goods produced in Australia (sections 269B, 269D, 269E, and 269SJ).
The Act outlines potential consequences for breaches, although specific penalties are not detailed in the explanatory statement. Generally, under the Customs Act 1901, breaches of customs regulations can lead to both civil and criminal penalties. Civil penalties may include fines, while criminal penalties can include imprisonment, reflecting the seriousness with which breaches of customs laws are treated. However, the explanatory statement does not provide explicit details on the maximum penalties or specific consequences for breaching this particular TCO. It is expected that those involved would refer to the broader provisions of the Customs Act and related legislation for more detailed information on penalties.