EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0924955
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.
Baulderstone Hornibrook applied for a TCO in respect of certain marine fender anchors on 14 July 2009.
Instrument
TCO No 0924955 was made on 25 September 2009. It declares that those certain marine fender anchors 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. 0924955 is taken to have come into force on 14 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 Commonwealth Parliament, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs). The Act was introduced to streamline the application process for tariff concessions and to ensure that the process is transparent and accessible for applicants. The Explanatory Statement for Tariff Concession Instrument No. 0924955 outlines the process and criteria for the Chief Executive Officer of Customs to make a TCO, emphasising that the application must meet core criteria such as the absence of substitutable goods produced in Australia. The policy objective behind this legislation is to facilitate efficient and fair trade by providing tariff relief where appropriate, ensuring that Australian businesses remain competitive without imposing undue burdens on the revenue system. The instrument in question, TCO No. 0924955, was issued to Baulderstone Hornibrook for certain marine fender anchors, granting a duty-free status for these goods and reflecting the absence of any substitutable goods produced domestically.
Scope and Application
The Tariff Concession Instrument No. 0924955, made under Part XVA of the Customs Act 1901, applies to the specific goods—certain marine fender anchors—as identified in the application submitted by Baulderstone Hornibrook. The instrument aims to provide tariff concessions by reducing the rate of customs duty on these goods from the general rate of 5% to free, provided that the application meets the core criteria as outlined in the Act. The application process involves the Chief Executive Officer of Customs (CEO) determining if the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. The scope of the Act includes entities and individuals involved in the importation of these specific marine fender anchors, and it extends across the national jurisdiction of Australia. The application is effective from the date it was lodged, which is 14 July 2009, and the instrument itself was registered on 25 September 2009. The Act does not disadvantage any person by affecting their rights as at the date of registration, and it notably does not impose any new liabilities on any person in respect of actions taken prior to the registration date.
Key Provisions
The main operative sections of this legislation, particularly sections 269C, 269B, 269D, 269E, 269F, and 269P, establish the framework for Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning goods. If the application is not for goods specified in section 269SJ, the CEO must determine if the application meets the core criteria in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the application meets these criteria, the CEO must issue a TCO, as outlined in section 269P(3), specifying the applicable tariff concession.
The Customs Act 1901 imposes several obligations on the parties involved in the process of obtaining a TCO. The applicant must ensure their application complies with the conditions set forth in sections 269C, 269B, 269D, and 269E. Specifically, they must demonstrate that no substitutable goods are produced in Australia and that the goods in question are not excluded by section 269SJ. The CEO, on the other hand, is required to publish a notice in the Gazette under subsection 269K(1) inviting submissions from interested parties, although in this case, no submissions were received. Additionally, the CEO must ensure that the TCO, once issued, does not affect the rights of any person other than the Commonwealth concerning actions taken before the registration date of the TCO.
Under the Customs Act 1901, breaches of the provisions governing TCOs can result in civil or criminal consequences. While specific offences and penalties are not detailed in the explanatory statement, general penalties for breaches of the Customs Act can include substantial fines and imprisonment, depending on the severity and intent of the breach. The maximum penalties are determined by the seriousness of the offence, and these could vary widely based on the specific breach and its impact. It is also important to note that failure to comply with the obligations set out in the Act, such as providing accurate information in an application or acting within prescribed timelines, could result in administrative sanctions, including the invalidation of the TCO or other enforcement actions by the Customs authorities.