EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1035501
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.
Venture Industries Campbellfield applied for a TCO in respect of certain sheets on 02 August 2010.
Instrument
TCO No 1035501 was made on 18 October 2010. It declares that those certain sheets 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. 1035501 is taken to have come into force on 02 August 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 was enacted to provide for the administration of customs and excise duties and the control of imports and exports. The Act, as amended, includes a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty to specified goods. The Tariff Concession Instrument No. 1035501 was introduced to address a specific application by Venture Industries Campbellfield for a tariff concession on certain sheets, which were found not to have substitutable goods produced in Australia, thereby meeting the core criteria under the Act. The policy objective of this instrument is to ensure that tariff concessions are granted where appropriate, supporting Australian industries by reducing the cost of imported goods where no domestic alternatives exist, without imposing liabilities on any person.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the establishment of Tariff Concession Orders (TCOs) which provide for lower rates of customs duty on certain goods. This mechanism applies to any person or entity that imports goods and seeks to avail themselves of reduced customs duties by demonstrating that no substitutable goods are produced in Australia. The scope of the Act is limited to the goods specified in a TCO application, provided they do not fall under the categories of goods outlined in section 269SJ that are ineligible for such concessions. The Act's application extends to all goods across Australia, governed by the national Customs Act 1901. The application process involves the Chief Executive Officer of Customs determining if the application meets the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business. Once a TCO is made, it is retroactive to the date of the application, impacting only future transactions and not disadvantaging any person by imposing liabilities for actions taken prior to the TCO's registration date. The process also includes a requirement for the CEO to invite submissions on the application before deciding, although in this instance, no submissions were received.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) relevant to the Tariff Concession Order (TCO) include sections 269C, 269B, 269D, 269E, 269F, 269P, 269SJ, and 269K. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. If the application meets the core criteria, the CEO must make a written order (section 269P(3)) that specifies the lower rate of customs duty applicable to those goods. This lower rate of duty is set out in the Customs Tariff Act 1995. The Act also mandates that the CEO must publish a notice in the Gazette inviting submissions from any interested parties (section 269K). The TCO is considered to come into force on the day the application was lodged (section 269S(1)).
The obligations imposed on parties or entities governed by the Act include ensuring that the goods for which a TCO is sought are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The applicant must also provide sufficient evidence to satisfy the CEO that no substitutable goods were produced in Australia at the time of application (section 269C). The CEO is required to publish a notice in the Gazette and invite submissions from any interested parties, allowing them an opportunity to object to the TCO (section 269K). Furthermore, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO was registered (section 269S).
The Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for breach related to TCOs. However, general provisions of the Act might apply, including provisions for penalties for providing false or misleading information in an application. The Customs Tariff Act 1995 may also provide for penalties in cases where duties are evaded or not paid correctly. It is important for parties to comply with the requirements of the Act and the TCO to avoid any potential legal consequences. The exact penalties would depend on the specific nature of the breach and the applicable laws at the time.