EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1009885
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.
Blucher Australia applied for a TCO in respect of certain seal rings on 25 February 2010.
Instrument
TCO No 1009885 was made on 21 May 2010. It declares that those certain seal rings 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. 1009885 is taken to have come into force on 25 February 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, as amended, provides for the making of Tariff Concession Orders (TCOs) which allow for reduced rates of customs duty on certain goods. Enacted by the Australian Parliament, this legislation aims to address the gap in tariff concessions for goods that are not produced in Australia and for which there are no substitutable goods. The Tariff Concession Instrument No. 1009885, issued under the authority of the Customs Act 1901, aims to provide tariff concessions for certain seal rings by Blucher Australia. The policy objective is to facilitate trade by reducing the customs duty on these specific goods, thereby enhancing their affordability and competitiveness in the market. The instrument, which came into effect on 25 February 2010, ensures that no existing rights or liabilities of any person, other than the Commonwealth, are adversely affected by its implementation.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process for making Tariff Concession Orders (TCOs) that result in a lower rate of customs duty on certain goods. This legislation applies to any person who may apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods, provided those goods are not explicitly excluded under section 269SJ of the Act. The Act’s scope extends nationally, as the CEO, who is the authority responsible for deciding on TCO applications, operates under the Commonwealth. The Act requires that for a TCO application to meet the core criteria, it must be established that no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269C, 269D, 269E and 269F. The application process includes a requirement for the CEO to publish a notice in the Gazette, inviting submissions from any interested parties; however, no submissions were received in response to the published notice for TCO No. 1009885. This TCO, concerning certain seal rings, was made effective from 25 February 2010, the date the application was lodged, and it does not affect the rights of any person, other than the Commonwealth, adversely nor does it impose any new liabilities.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 1009885, under the Customs Act 1901, revolve around the creation and implementation of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269K, 269P, 269S). These sections detail the process by which an application for a TCO can be made, the criteria that must be met for the CEO to grant such an order, and the procedures for notifying the public about these applications. Specifically, section 269F allows an individual or entity to apply for a TCO in respect of specific goods, while section 269C outlines the core criteria that must be satisfied for an application to be considered. The CEO must publish a notice in the Gazette (subsection 269K(1)) once an application is accepted as valid, inviting submissions from any interested parties regarding the application.
The Act imposes several obligations and requirements on the parties involved. For the applicant, it is necessary to ensure that the goods in question are not listed in section 269SJ of the Act, which excludes certain goods from being eligible for a TCO. The CEO must then assess whether the application meets the core criteria specified in section 269C, which includes verifying that no substitutable goods were produced in Australia on the day the application was lodged (section 269P(3)). Additionally, the CEO is required to make the TCO public by publishing a notice in the Gazette (subsection 269K(1)), providing an opportunity for any interested party to object to the order. The TCO will come into force on the day the application was lodged, as stipulated in subsection 269S(1).
The legislation outlines specific consequences for breaches of the Act's provisions, although it does not detail specific offences or penalties within the explanatory statement. Generally, under the Customs Act 1901, breaches can lead to various civil and criminal penalties, depending on the nature and severity of the violation. Penalties can include fines, imprisonment, or both, with the exact penalties determined by the specific circumstances of the breach and any applicable regulations or subsidiary legislation. The Customs Act 1901 and associated regulations provide the framework within which these penalties are applied, ensuring that compliance with the Act is rigorously enforced.