EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0914435
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.
Shark Bay Resources applied for a TCO in respect of certain marine pilings on 30 April 2009.
Instrument
TCO No 0914435 was made on 24 July 2009. It declares that those certain marine pilings 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. 0914435 is taken to have come into force on 30 April 2009.
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, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This Act aims to address the need for reduced customs duties on certain imported goods under specific conditions. The problem it seeks to resolve is the potential economic disadvantage faced by Australian businesses when substitutable goods are not produced domestically, thereby encouraging reliance on imports. The policy objective is to promote Australian manufacturing and reduce the cost of imported goods, thereby stimulating economic growth and competition. The explanatory statement for Tariff Concession Instrument No. 0914435, issued on 24 July 2009, exemplifies this process by granting tariff concessions to Shark Bay Resources for certain marine pilings, reducing the duty from 5% to free, effective from 30 April 2009, after satisfying the core criteria outlined in the Act.
Scope and Application
The Tariff Concession Instrument No. 0914435, made under the Customs Act 1901, applies to certain marine pilings as specified by Shark Bay Resources, who applied for the tariff concession on 30 April 2009. The application was processed by the Chief Executive Officer of Customs (CEO), who, upon finding that no substitutable goods were produced in Australia in the ordinary course of business, made a written order (Tariff Concession Order, TCO) on 24 July 2009. The order declares that the specified marine pilings are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, granting them a duty-free status where the general rate of duty is otherwise 5%. The CEO was required to publish a notice in the Gazette inviting submissions from interested parties, none of which were received. Consequently, the TCO is effective from the date of the application, 30 April 2009, and while it does not disadvantage any person other than the Commonwealth, it does benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date. The TCO does not impose any liabilities on any person.
The scope of the Customs Act 1901, as extended by this TCO, is specific to the marine pilings applied for by Shark Bay Resources, and the application of the TCO is limited to the geographic jurisdiction of Australia. The Act does not explicitly exclude any categories of entities or industries, though it does exclude goods specified in section 269SJ from being subject to a TCO. The Act also allows for further extension or restriction of application through subordinate instruments, which may include regulations or further orders under the Act. The operation of this TCO is subject to the terms and conditions set out in the Act and any relevant subsidiary legislation.
Key Provisions
The Tariff Concession Instrument No. 0914435 under the Customs Act 1901 (section 269P(3)) declares that certain marine pilings are subject to a prescribed tariff concession order (TCO). This instrument was made on 24 July 2009, following an application by Shark Bay Resources on 30 April 2009. The CEO of Customs was satisfied that these marine pilings qualified for the concession, as there were no substitutable goods produced in Australia at the time the application was lodged (section 269C). This means that the general rate of duty on these goods, which is 5%, is reduced to free under this specific TCO.
The obligations imposed by this TCO on the parties it governs are primarily centered around compliance with the terms of the concession. The CEO of Customs must ensure that the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business at the time of application. The applicant, in this case Shark Bay Resources, must provide accurate and complete information to substantiate their claim for tariff concession. Additionally, the CEO must publish a notice in the Gazette inviting any person to lodge a submission if they believe the TCO should not be made (subsection 269K(1)). Although no submissions were received for this particular TCO, this process ensures transparency and allows for potential objections to be considered.
For breaches of the provisions under the Customs Act 1901, various offences and penalties may apply. While the specific Instrument No. 0914435 does not detail particular penalties, general provisions within the Customs Act outline potential consequences for non-compliance. For instance, providing false or misleading information in an application could be considered an offence under section 230 of the Act, which may result in civil or criminal penalties. Civil penalties could include fines up to $22,200 for individuals and $111,000 for corporations, while criminal penalties could involve imprisonment, depending on the severity of the breach. These provisions ensure that all parties adhere to the legal requirements and maintain the integrity of the tariff concession scheme.