EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0940330
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.
Woolworths Ltd applied for a TCO in respect of certain rope sheave on 26 October 2009.
Instrument
TCO No 0940330 was made on 15 January 2010. It declares that those certain rope sheave 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 10%. 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. 0940330 is taken to have come into force on 26 October 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, governs the administration of customs duties in Australia. Part XVA of this Act establishes a framework for the creation of Tariff Concession Orders (TCOs), which allow for reduced customs duties on specific goods under certain conditions. This legislative measure was introduced to address the need for tariff concessions in cases where goods subject to application do not have substitutable Australian-produced alternatives, thus potentially benefiting the economy by encouraging imports where local production is not viable. Instrument No. 0940330, made under the Customs Act, specifically grants tariff concessions on certain rope sheaves, reducing the customs duty from 10% to free, provided no substitutable goods are produced in Australia. The instrument was made following an application by Woolworths Ltd, and after no objections were received, it came into force on the date of the application, 26 October 2009.
Scope and Application
The Tariff Concession Instrument No. 0940330, issued under the Customs Act 1901, applies to entities or individuals seeking tariff concessions for specific goods, in this case, certain rope sheaves. The application of this legislation is administered by the Chief Executive Officer of Customs who must determine whether the application for a Tariff Concession Order (TCO) meets the core criteria specified in the Act. The application process requires that no substitutable goods are produced in Australia at the time the application is lodged, and if the CEO is satisfied with the application, a TCO is issued, which in this instance, resulted in the exemption of duty for the specified rope sheaves. This legislation is applicable on a national level across Australia, governed by the Commonwealth. There are no stated exclusions or exemptions in the instrument itself, although section 269SJ of the Customs Act 1901 outlines goods that cannot be subject to a TCO. The instrument does not explicitly mention any subordinate legislation extending or restricting its application.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0940330, under the Customs Act 1901, involve the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (sections 269C, 269F, and 269P). Specifically, section 269F allows a person to apply to the CEO for a TCO in respect of goods. If the CEO determines that the application meets the core criteria, as outlined in section 269C, they must make a written order (section 269P). In this instance, Woolworths Ltd applied for a TCO concerning certain rope sheaves, and the CEO issued TCO No. 0940330 on 15 January 2010, declaring that these rope sheaves are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, as no substitutable goods were produced in Australia.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must ensure that any TCO application is not for goods specified in section 269SJ of the Act, which are ineligible for a TCO. If the application is valid, the CEO must determine if it meets the core criteria, as defined in section 269C. This involves verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Moreover, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. The CEO must then consider these submissions before making a decision.
Breaching the conditions outlined in the Customs Act 1901 and the Tariff Concession Instrument can lead to civil or criminal consequences. While the explanatory statement does not specify penalties, breaches of similar customs regulations typically incur fines or imprisonment under the Customs Act. For example, knowingly making a false statement to obtain a concession or evading duty could lead to fines of up to $22,000 or imprisonment for up to two years, or both, under section 245 of the Customs Act. Additionally, the CEO's failure to comply with the statutory requirements for publishing notices and considering submissions could also result in legal consequences.