EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0918249
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.
Marque Capital Pty Ltd applied for a TCO in respect of certain steel cages on 29 May 2009.
Instrument
TCO No 0918249 was made on 21 August 2009. It declares that those certain steel cages 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. 0918249 is taken to have come into force on 29 May 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 Tariff Concession Instrument No. 0918249 was enacted under the Customs Act 1901, to address the need for providing tariff concessions on specific goods that are not produced in Australia. The Customs Act 1901 facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aiming to lower customs duty rates for goods that meet certain criteria. The Act empowers the CEO to grant tariff concessions if no substitutable goods are produced in Australia, which was the case for the application by Marque Capital Pty Ltd for certain steel cages. The instrument, TCO No. 0918249, was issued on 21 August 2009, declaring that the specified steel cages are subject to a duty rate of free, as opposed to the general rate of 5%. This legislative measure ensures that importers of these goods can benefit from tariff reductions without incurring any new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0918249 under the Customs Act 1901 applies to individuals and entities, specifically those seeking tariff concessions on certain goods, in this case steel cages. The application of this legislation is triggered when an entity, such as Marque Capital Pty Ltd, applies for a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs. This Act applies to the Commonwealth jurisdiction and affects the importation of goods into Australia. The scope of the Act is limited to ensuring that the application for a TCO meets the core criteria, which includes verifying that no substitutable goods are produced in Australia in the ordinary course of business. The Act does not extend to goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The application of the Act may be further defined or refined through subordinate instruments, such as regulations or further orders made under the Customs Act 1901.
Key Provisions
The Customs Act 1901, particularly Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F allows an individual or entity to apply for a TCO for specific goods. If the CEO determines that the application pertains to goods that are not prohibited under section 269SJ, they must assess whether the application satisfies the core criteria outlined in section 269C. This involves verifying that, on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the application meets these criteria, the CEO is required to issue a TCO, as stipulated in section 269P(3), which declares that the goods in question are subject to a specified tariff rate in Schedule 4 of the Customs Tariff Act 1995.
The obligations under the Act primarily focus on the process for applying for and issuing TCOs. An applicant must submit a valid application under section 269F, ensuring it pertains to eligible goods not listed in section 269SJ. The CEO has the responsibility to evaluate the application against the core criteria set out in section 269C. If the application meets these criteria, the CEO must proceed to issue a written TCO as per section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not be granted. This transparency measure ensures that the process is open and accountable.
Breaching the provisions of the Customs Act 1901 can result in various civil and criminal consequences. Although the explanatory statement does not detail specific penalties, violations of customs regulations generally attract significant fines and potential imprisonment under the broader customs legislation. For instance, misleading or providing false information in an application could be considered an offence under section 273A of the Customs Act, with penalties including fines up to 10,000 penalty units or imprisonment for up to five years, or both. These penalties underscore the importance of compliance with the statutory requirements and the potential repercussions for non-compliance.