EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0929535
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.
Marine and Civil Construction applied for a TCO in respect of certain wharf fender system marine cones on 12 August 2009.
Instrument
TCO No 0929535 was made on 30 October 2009. It declares that those certain wharf fender system marine cones 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. 0929535 is taken to have come into force on 12 August 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 was enacted to facilitate the regulation and management of customs and excise in Australia. Part XVA of the Act establishes a framework for Tariff Concession Orders (TCOs), which are designed to provide tariff relief for specific goods by applying a lower rate of customs duty. The Tariff Concession Instrument No. 0929535, made under the authority of the Customs Act 1901, addresses the problem of ensuring that certain goods, which are not produced domestically and have no substitutable alternatives, are subject to a reduced customs duty rate. This instrument was created following an application by Marine and Civil Construction for tariff concessions on certain wharf fender system marine cones. The policy objective is to promote the import of goods that are not domestically produced, thereby supporting industries that rely on imported materials.
Scope and Application
The Tariff Concession Instrument No. 0929535, made under the Customs Act 1901, applies to the concession of customs duty for certain wharf fender system marine cones, which are goods that do not have substitutable equivalents produced in Australia. The Act applies to any person or entity that wishes to import these specific goods into Australia, thereby benefiting from the reduced or free customs duty rate as outlined in the instrument. The instrument was made on 30 October 2009 and came into effect on the date the application was lodged, 12 August 2009. The application process and the subsequent making of the Tariff Concession Order (TCO) were conducted by the Chief Executive Officer of Customs, following the criteria set out in the Customs Act 1901, including the requirement that no substitutable goods were being produced in Australia at the time of application. This instrument does not extend to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. Furthermore, the TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person for actions taken prior to the registration of the TCO.
Key Provisions
The Customs Act 1901, under Part XVA, sets up a scheme for the creation of Tariff Concession Orders (TCOs) which are made by the Chief Executive Officer of Customs (CEO) (sections 269F and 269P(3)). An application for a TCO can be submitted by a person in respect of goods (section 269F). If the application is not in respect of goods specified in section 269SJ, the CEO must determine if it meets the core criteria (section 269C). A TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). The terms "goods produced in Australia," "ordinary course of business," and "substitutable goods" are defined in sections 269D, 269E, and 269F respectively. If the CEO determines that the application meets the core criteria, they must make a written order (section 269P(3)).
The obligations under the Customs Act 1901 for the parties involved are quite clear. The CEO has a responsibility to assess whether an application for a TCO meets the core criteria and, if so, to make the written order. The applicant must ensure that their application is valid and meets the specified criteria, including that no substitutable goods were produced in Australia on the day the application was lodged. The CEO also has an obligation to publish a notice in the Gazette, inviting any interested parties to make submissions if they believe the TCO should not be made (subsection 269K(1)).
Breach of the provisions in the Customs Act 1901 related to the making of TCOs can lead to civil and criminal consequences. While the explanatory statement does not specify particular offences or penalties, under Australian law, breaches of the Customs Act 1901 can result in fines and, in some cases, imprisonment. The maximum penalties can vary significantly depending on the nature and severity of the breach. For example, knowingly making a false statement in a customs declaration can result in a fine of up to $22,000 or imprisonment for up to two years, or both (section 244AB of the Customs Act 1901). The specifics of penalties would need to be checked against the full text of the Customs Act 1901 and any relevant regulations.