EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1043174
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.
Waratah Thoroughbreds applied for a TCO in respect of certain salt water horse walker prefabricated buildings on 21 September 2010.
Instrument
TCO No 1043174 was made on 06 December 2010. It declares that those certain salt water horse walker prefabricated buildings 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. 1043174 is taken to have come into force on 21 September 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 Tariff Concession Instrument No. 1043174 was enacted under the Customs Act 1901 with the aim of providing tariff concessions for specific goods, thereby addressing the issue of high customs duty rates on certain imported items that have no local substitutes. This instrument was introduced to facilitate smoother trade practices by reducing the duty on goods that are not produced domestically, thus encouraging imports and potentially lowering costs for businesses and consumers. The Chief Executive Officer of Customs is the enacting body responsible for making such decisions, with the policy objective being to support economic efficiency and competitiveness by ensuring that imported goods are competitively priced relative to any potential local production. The instrument came into force on the date the application was lodged, ensuring that any benefits are applicable from the outset of the tariff concession process.
Scope and Application
The Tariff Concession Order No. 1043174 under the Customs Act 1901 applies to certain salt water horse walker prefabricated buildings, which are eligible for tariff concessions due to the absence of substitutable goods produced in Australia. The act permits the Chief Executive Officer of Customs to grant these concessions, ensuring that no substitutable goods were produced domestically on the day the application was lodged. This instrument specifically benefits importers of these goods by providing them with the opportunity to apply for a refund of duty on goods imported since the day the order came into force, which is 21 September 2010. The TCO does not disadvantage any person other than the Commonwealth nor impose any liabilities on such persons. It is important to note that the TCO applies on a Commonwealth level and its scope does not extend to state or territory legislation. Additionally, the TCO does not affect any pre-existing rights or liabilities incurred prior to its registration.
Key Provisions
The Tariff Concession Instrument No. 1043174 under the Customs Act 1901 (the Act) applies specifically to certain salt water horse walker prefabricated buildings, as declared by the Chief Executive Officer of Customs (the CEO) on 06 December 2010. This instrument, as referenced in section 269F, allows for a lower rate of customs duty for these goods, setting it at free rather than the general rate of 5% (section 269P(3)). To qualify for this concession, the CEO must be satisfied that no substitutable goods were produced in Australia on the date the application was lodged, as per sections 269C and 269D.
The obligations imposed by this Act on the parties involved primarily centre around the application and assessment process for the Tariff Concession Orders (TCO). The applicant, in this case Waratah Thoroughbreds, must submit a valid application that meets the core criteria set out in section 269C of the Act. The CEO, upon receiving a valid application, has the obligation to decide whether it meets these criteria and, if so, to issue a TCO as per section 269P(3). Additionally, as stipulated in subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received in this instance.
In terms of potential consequences for breach, the Act does not specify any particular offences or penalties for failing to comply with the provisions of a TCO. However, the broader legal framework within which the Act operates does provide for penalties in cases of non-compliance with customs regulations. For instance, under the Customs Act, there are civil and criminal penalties for providing false or misleading information in connection with an import or export declaration, which could indirectly affect the validity or enforcement of a TCO. While the specific maximum penalties are not detailed in the explanatory statement, they can include fines and imprisonment, depending on the severity of the breach.
The commencement of the TCO, as per subsection 269S(1), is effective from the date the application was lodged, which in this case was 21 September 2010. This means that any imported goods falling under the TCO from this date onwards will benefit from the reduced duty rate. The TCO does not retroactively affect any rights or impose any liabilities on persons other than the Commonwealth, ensuring that the rights of importers are preserved and that they can apply for a refund of duty paid on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations.