EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1004687
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.
Beaver Branos Limited applied for a TCO in respect of certain mooring chain on 27 January 2010.
Instrument
TCO No 1004687 was made on 16 April 2010. It declares that those certain mooring chain 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. 1004687 is taken to have come into force on 27 January 2010.
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 administration of customs duties and the regulation of imports and exports. Part XVA of this Act, specifically, outlines the scheme for Tariff Concession Orders (TCOs), which can be made by the Chief Executive Officer of Customs (CEO) to lower the customs duty on certain goods. This legislative instrument aims to address the gap by providing a mechanism for tariff concessions to support industries that may be at a disadvantage due to the lack of local production of substitutable goods. The policy objective is to facilitate the importation of goods that are not produced domestically, thereby supporting Australian industries by ensuring fair competition. Instrument No. 1004687, made on 16 April 2010, is an example of such a concession, granting a duty-free status to certain mooring chains that were not produced in Australia, thereby benefiting the applicant, Beaver Branos Limited, and potentially other importers of similar goods.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs), applies to individuals and entities seeking to import specific goods into Australia by providing a mechanism to reduce the customs duty on those goods under certain conditions. The Act allows the Chief Executive Officer of Customs to grant a TCO if it is determined that no substitutable goods are produced in Australia in the ordinary course of business. This process is applicable nationally, with the specific TCO No. 1004687 granted to Beaver Branos Limited for certain mooring chains, effective from 27 January 2010. The Act mandates that the CEO publish notices in the Gazette inviting submissions from interested parties, although no submissions were received for this particular TCO. The scope of this legislation is extended through subordinate instruments, including the Customs Tariff Act 1995, which specifies the tariff items applicable to the TCO. Importantly, the TCO does not retroactively affect the rights of any person or impose liabilities for actions taken before the TCO's effective date.
Key Provisions
The Customs Act 1901 (the Act) allows for Tariff Concession Orders (TCOs) under section 269F, which can be applied for by any person to the Chief Executive Officer of Customs (the CEO). When an application is lodged, the CEO is required to determine if the goods in question are eligible under the core criteria, as outlined in section 269C. These criteria necessitate that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was made. Section 269P(3) mandates that if the CEO finds the application meets the core criteria, they must issue a written TCO, specifying the applicable item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed on parties by the Act include the requirement for applicants to provide sufficient information to demonstrate that the goods are eligible for a TCO and that no substitutable goods were produced in Australia. The CEO is obligated to process applications efficiently and to publish notices in the Gazette inviting public submissions if there are any concerns about the TCO. The CEO must also decide whether to proceed with the TCO based on the information provided and the core criteria stipulated in the Act. Once a TCO is issued, the CEO must ensure that the rights of all parties are protected, and any affected importers can apply for a refund of duty under the Regulations.
Failure to comply with the provisions of the Act can lead to civil or criminal consequences. While the Explanatory Statement does not detail specific penalties, breaches of the Act or its Regulations could potentially result in fines or other sanctions. For example, incorrect claims for duty refunds under the Tariff Concession Orders could be subject to the general penalties outlined in the Customs Act, which could include financial penalties and, in serious cases, criminal charges. The maximum penalties would depend on the specific breach and the provisions of the Act or related legislation.
In summary, the Act establishes a framework for the issuance of Tariff Concession Orders, ensuring that eligible goods receive lower rates of customs duty. The obligations primarily lie with the applicant to provide accurate information and the CEO to process applications and issue TCOs correctly. Breaches of the Act or related regulations can lead to civil or criminal penalties, although the specifics are not detailed in the Explanatory Statement.