EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1117707
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.
Silverlock Operations Pty Ltd applied for a TCO in respect of certain pallets on 03 June 2011.
Instrument
TCO No 1117707 was made on 22 August 2011. It declares that those certain pallets 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. 1117707 is taken to have come into force on 03 June 2011.
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 managing customs duties and tariffs, including the provision for Tariff Concession Orders (TCOs) under Part XVA. The Act was designed to address the need for streamlined tariff concessions for specific goods, facilitating trade and economic efficiency by allowing lower customs duty rates on goods that are not domestically produced. The introduction of TCOs allows the Chief Executive Officer of Customs to respond to applications from businesses seeking tariff concessions for goods not manufactured in Australia, thereby potentially reducing the cost of imported goods and enhancing competitiveness. The policy objective is to support the efficient operation of international trade by providing tariff relief where appropriate, subject to certain criteria outlined in the Act. This mechanism ensures that the application of customs duties is fair and reflective of the domestic production landscape, while also promoting a conducive environment for trade and investment.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 1117707, outlines a mechanism through which certain goods may be subject to reduced customs duty rates, provided they meet specific criteria. The instrument applies to entities or individuals seeking tariff concessions for particular goods, with the primary focus being on ensuring that the goods in question are not produced domestically and do not have suitable substitutes available in Australia. The scope of the Act extends to all goods imported into Australia, subject to the conditions outlined in the Act and its subordinate instruments. The instrument, which came into force on the date of the application, 03 June 2011, is targeted at specific pallets for which Silverlock Operations Pty Ltd applied for tariff concessions. These pallets now attract a zero duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, as opposed to the general rate of 5%. The instrument does not affect the rights of any party as they stood prior to its enactment and does not impose any new liabilities on individuals or entities.
Key Provisions
The Tariff Concession Instrument No. 1117707 under the Customs Act 1901, specifically operates through sections such as 269C, 269D, 269E, 269F, 269P, 269K, and 269S, among others. Section 269F enables an applicant, such as Silverlock Operations Pty Ltd, to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria, such as the absence of substitutable goods produced in Australia (section 269C), the CEO is mandated to issue a TCO. The TCO is effective from the date the application was lodged (subsection 269S(1)), and in this instance, it was taken to have come into force on 03 June 2011. Furthermore, section 269K requires the CEO to publish a notice in the Gazette inviting submissions from interested parties, although no submissions were received in this case.
The Act imposes several obligations on the CEO and the applicants. The CEO must ensure that the application does not pertain to goods specified in section 269SJ, which are ineligible for a TCO. The CEO also has the responsibility to assess whether the application meets the core criteria, specifically the absence of substitutable goods produced in Australia, as defined by sections 269D and 269E. Upon meeting these criteria, the CEO must issue a written TCO. Additionally, the CEO must publish a notice in the Gazette (subsection 269K(1)) to allow for public submissions, although no submissions are required for the TCO to proceed.
Failure to comply with the provisions of the Customs Act 1901, including the proper application and issuance of TCOs, can result in legal consequences. Although the explanatory statement does not detail specific offences or penalties, breaches of the Act can lead to civil or criminal sanctions depending on the severity and nature of the violation. The maximum penalties for breaches can vary widely and are typically outlined in the relevant sections of the Act or other associated legislation. For instance, penalties for false statements or fraudulent activities related to customs duties can be substantial, often including fines and imprisonment. Therefore, adherence to the requirements and obligations set forth by the Act is crucial to avoid such consequences.