EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0842801
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.
John Wagstaff Constructions applied for a TCO in respect of certain kelly bars on 04 December 2008.
Instrument
TCO No 0842801 was made on 27 February 2009. It declares that those certain kelly bars 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. 0842801 is taken to have come into force on 04 December 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 imposition of tariffs on imported goods. This Act was amended to include Part XVA, which allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can reduce the rate of customs duty for certain goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The policy objective behind this provision is to encourage the import of goods that cannot be efficiently produced domestically, thus supporting economic efficiency and consumer access to a wider range of products. The Explanatory Statement for Tariff Concession Instrument No. 0842801 details a specific case where John Wagstaff Constructions applied for a tariff concession on certain kelly bars. Following a determination by the CEO that no substitutable goods were being produced in Australia, a TCO was issued, effectively reducing the duty on these goods from 5% to free. This legislative mechanism ensures that the rights of importers are preserved and that they may benefit from duty refunds for goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901, as applied through Tariff Concession Instrument No. 0842801, applies to individuals and entities seeking tariff concessions on specific goods. It pertains to the process by which certain goods can receive reduced customs duty rates, provided they meet the core criteria outlined in the Act, specifically under section 269C. This process is applicable to goods that are not substitutable by any produced in Australia, as defined by sections 269D and 269E, and are not those listed in section 269SJ, which cannot be subject to a tariff concession order. The application of this Act is Commonwealth-wide and is enforced by the Chief Executive Officer of Customs, who has the authority to make written orders declaring tariff concessions. The instrument itself does not disadvantage any person and does not impose any liabilities, while allowing importers to apply for duty refunds on goods imported since the date the order came into force.
Key Provisions
The main operative sections of this legislation revolve around the process of applying for and granting Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. If the application is valid and does not pertain to goods specified in section 269SJ, the CEO is required to determine whether it meets the core criteria outlined in section 269C. This involves assessing whether no substitutable goods were produced in Australia on the day the application was lodged. If these criteria are met, the CEO must issue a written TCO as per section 269P(3), declaring that the goods in question are subject to a specific item in Schedule 4 of the Customs Tariff Act 1995, thereby applying a reduced or free rate of duty.
The Act imposes several obligations on the parties involved. Firstly, the applicant must ensure their application meets the criteria specified in section 269C. This includes demonstrating that no substitutable goods were produced in Australia. The CEO, on their part, must evaluate the application to ascertain if it meets these criteria. Once a TCO application is accepted as valid, the CEO is mandated by section 269K(1) to publish a notice in the Gazette, inviting any interested party to submit any reasons why the TCO should not be granted. This step is essential to allow for transparency and public participation in the process.
Failure to comply with the provisions of the Act may lead to various consequences. While the Act does not explicitly outline specific offences or penalties for non-compliance with TCO applications, general provisions under the Customs Act 1901 apply. For example, if a party provides false information in an application or engages in fraudulent activities, they could face criminal charges under sections related to false statements and fraud. Additionally, failure to adhere to the duty refund provisions under the Regulations could result in civil penalties, including fines. The exact penalties would depend on the severity of the breach and the specific provisions of the Customs Act 1901 and related Regulations that are contravened.