EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0934937
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 mooring bollard anchors on 17 September 2009.
Instrument
TCO No 0934937 was made on 11 December 2009. It declares that those certain mooring bollard 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. 0934937 is taken to have come into force on 17 September 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 by the Australian Parliament to provide a comprehensive framework for the regulation of customs and excise. This Act includes provisions for the imposition of customs duties and other charges, as well as measures for the control and regulation of the importation and exportation of goods. One of the mechanisms established by the Act is the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) under Part XVA of the Act. These orders allow for a lower rate of customs duty to be applied to certain goods if specific criteria are met. The problem or gap this mechanism addresses is the need to provide tariff relief for goods that cannot be produced in Australia or for which no suitable substitute is available locally, thereby supporting economic efficiency and trade competitiveness. The policy objective is to facilitate the import of goods that are essential for Australia’s economy but not produced domestically, thus ensuring that businesses and consumers have access to a competitive range of products without the burden of high customs duties.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). This legislation applies to any person who can demonstrate that specific goods, the subject of a TCO application, are not substitutable by goods produced in Australia in the ordinary course of business. Once an application is made under section 269F and the CEO determines that it meets the core criteria outlined in sections 269C and 269S, a TCO can be issued, effectively lowering the customs duty on the specified goods. For instance, in the case of Baulderstone Hornibrook’s application for certain mooring bollard anchors, a TCO was issued on 11 December 2009, providing a tariff concession that brought the duty rate down from the general 5% to free. This Act has a national jurisdictional reach, impacting all entities and industries involved in the importation of the specified goods. The application of the Act can be extended through subordinate instruments, although the primary legislation itself does not explicitly provide for such extensions. The scope of the Act does not disadvantage any person other than the Commonwealth and does not impose new liabilities on any person.
Key Provisions
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) can be implemented, as detailed in Part XVA. Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods. If the CEO is convinced that the application is not in relation to goods specified in section 269SJ, they must then determine if the application meets the core criteria outlined in section 269C. The CEO must ensure that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Substitutable goods are defined in section 269D and are those that can be put to a use corresponding to the goods in question, as per section 269E.
The CEO's obligations under the Act are significant. Once the CEO is satisfied that a TCO application meets the core criteria, they must issue a written order (a TCO) declaring the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies. This was precisely the case with TCO No. 0934937, which was issued on 11 December 2009 for certain mooring bollard anchors, effective from 17 September 2009, the date the application was lodged. The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties, although in this instance, no submissions were received.
Failure to comply with the requirements of the Customs Act 1901 can result in various penalties and consequences. While the specific penalties for breaches are not detailed in this explanatory statement, the general legal framework suggests that penalties can be significant. The Act outlines both civil and criminal penalties for non-compliance, with maximum penalties often linked to the severity and intent of the breach. For instance, knowingly making false statements in an application could lead to criminal charges, while administrative penalties might apply for less severe breaches. The specific penalties would depend on the nature and extent of the breach, but the potential consequences underscore the importance of adhering to the statutory requirements.