EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922647
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.
Stauff Corporation applied for a TCO in respect of certain multiple conductor clamps on 01 July 2009.
Instrument
TCO No 0922647 was made on 18 September 2009. It declares that those certain multiple conductor clamps 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. 0922647 is taken to have come into force on 01 July 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 Australian Parliament, provides a framework for the regulation of imports and exports through the imposition of customs duties and other charges. Specifically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) to provide preferential tariff rates on certain goods. This is achieved through a process whereby a person can apply to the Chief Executive Officer of Customs (CEO) for a TCO if the goods in question do not fall under the exclusions specified in section 269SJ. If the CEO determines that the application meets the core criteria, as outlined in sections 269C, 269B, and 269D, a TCO is issued which declares the goods to which a specific item of Schedule 4 of the Customs Tariff Act 1995 applies, thereby altering the rate of duty applicable to those goods. The objective of this legislative framework is to facilitate access to certain goods at a reduced tariff rate, thereby encouraging trade and potentially lowering costs for importers.
Scope and Application
The Tariff Concession Instrument No. 0922647, issued under the Customs Act 1901, pertains specifically to the application of tariff concessions on certain multiple conductor clamps, which are subject to a tariff concession order made by the Chief Executive Officer of Customs. This legislative instrument applies to the goods specified in the TCO and the entities involved in the importation of these goods, ensuring that the lower rate of customs duty, which is free in this case, is applicable. The geographic reach of this Act extends nationally, as it is a Commonwealth instrument. There are no exclusions or exemptions specified in the TCO itself, though it is contingent upon the criteria outlined in the Customs Act 1901, particularly the absence of substitutable goods produced in Australia at the time of application. The application process involves the CEO reviewing the submission against the legislative criteria, and in this instance, no objections were received, leading to the issuance of the TCO. The TCO also ensures that no existing rights of parties other than the Commonwealth are adversely affected and provides a mechanism for importers to claim duty refunds for goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0922647 under the Customs Act 1901 (section 269P(3)) declare that certain multiple conductor clamps are subject to a concession on the rate of customs duty. This means that the general rate of duty, which would typically be 5% as per item 50 of Schedule 4 to the Customs Tariff Act 1995, is reduced to free for these specific goods. This concession is effective from the date the application for the tariff concession was lodged, which is 01 July 2009. The instrument (section 269S(1)) ensures that the rights of persons other than the Commonwealth are not adversely affected by the concession, and it allows for a refund of duty for importers of these goods from the commencement date.
Under the Customs Act 1901, the Chief Executive Officer of Customs (CEO) is tasked with the responsibility of making Tariff Concession Orders (TCOs) (section 269F). To make such an order, the CEO must first determine that the application meets the core criteria set out in section 269C. This involves confirming that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, the CEO must publish a notice in the Gazette inviting any objections to the TCO and consider any submissions received (section 269K(1)). In this case, no submissions were received, leading to the issuance of TCO No. 0922647 on 18 September 2009.
Entities and individuals governed by this legislation must adhere to several obligations and requirements. The CEO must rigorously assess each application to ensure it complies with the core criteria, which includes verifying the absence of substitutable goods in Australia (section 269C). Importers, upon benefiting from the tariff concession, may apply for a refund of any duty paid on the goods since the effective date of the TCO (Regulation 126(1)(r)). The CEO must also ensure that the publication of the notice in the Gazette is done promptly to allow for any objections or submissions from interested parties, even though in this instance, none were received.
Failure to comply with the provisions of the Customs Act 1901 and the related regulations may result in various civil or criminal consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs laws generally carry significant penalties. For example, under the Customs Act, penalties for non-compliance can include fines and imprisonment. For instance, section 214 of the Act provides for penalties of up to $11,100 for individuals and significantly higher amounts for corporations, along with potential imprisonment terms for serious offences. Additionally, section 251 of the Act outlines the penalties for smuggling, which can include fines of up to $222,000 and imprisonment for up to 10 years for individuals, with higher penalties for corporations.