EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0505231
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.
Tyre Crumb Australia Pty Ltd applied for a TCO in respect of certain tyre recycling plants on 11 May 2005.
Instrument
TCO No 0505231 was made on 07 October 2005. It declares that those certain tyre recycling plants 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. 0505231 is taken to have come into force on 11 May 2005.
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 by the Australian Parliament to provide a comprehensive framework for the regulation of customs and excise duties, border control, and the administration of related laws. In 2005, the Customs Act was amended to include Part XVA, which introduced a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. This legislative change aimed to address the gap in providing tariff concessions for certain goods, thereby promoting trade and industry development by reducing customs duty burdens on specific items. The policy objective behind this scheme is to facilitate the import of goods that are not domestically produced or are not readily available in the Australian market, thus supporting economic efficiency and competitiveness. The process for applying for a TCO requires satisfying the core criteria, including ensuring that no substitutable goods are produced in Australia, and involves public consultation as stipulated in the Act.
Scope and Application
The Customs Act 1901, as amended through Tariff Concession Instrument No. 0505231, applies to goods specifically identified in applications for Tariff Concession Orders (TCOs) made under section 269F. These TCOs are intended for goods not produced in Australia in the ordinary course of business, and that do not fall under the exclusions specified in section 269SJ. The application of the Act extends to the Chief Executive Officer of Customs (CEO), who is responsible for deciding whether to grant a TCO based on the criteria outlined in sections 269C and 269P. The geographic reach of this legislation is national, applying across Australia in accordance with the Commonwealth’s legislative jurisdiction. The Act does not disadvantage any person other than the Commonwealth and does not impose liabilities on persons other than the Commonwealth in respect of actions taken prior to the TCO's registration. The TCO's commencement date aligns with the application date, as specified in subsection 269S(1), meaning that the tariff concession is retroactive to the date the application was lodged. This particular TCO, effective from 11 May 2005, benefits importers by allowing them to apply for duty refunds for goods imported since that date under Regulation 126(1)(r).
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0505231, under the Customs Act 1901 (section 269F), provide the framework for the application and approval of Tariff Concession Orders (TCOs). Section 269C specifies the core criteria that must be satisfied for an application to be approved, primarily ensuring that no substitutable goods are produced in Australia at the time of the application. Upon meeting these criteria, the Chief Executive Officer of Customs (section 269P(3)) must issue a TCO, which applies a reduced customs duty rate, in this case, free of charge instead of the general rate of 5% (Schedule 4, item 50).
Entities subject to this Act must comply with the process outlined for applying for a TCO. This includes ensuring that their application meets the specified core criteria, such as the absence of substitutable goods produced in Australia. Additionally, applicants must be prepared for their application to be published in the Gazette (section 269K(1)) to allow for any objections from interested parties. The Act imposes the responsibility on the CEO to assess applications based on these criteria and to make timely decisions regarding the approval or rejection of TCO applications.
Breaches of the provisions outlined in this Act may lead to specific civil or criminal consequences. While the Act does not explicitly detail penalties for non-compliance, it is implied that failure to adhere to the stipulated application procedures or misrepresentation of facts in an application could result in the rejection of the TCO application. Furthermore, any subsequent misuse of a TCO, such as the importation of goods not genuinely intended for the specified use, could lead to legal action under customs regulations, potentially including fines or other penalties as stipulated under the broader Customs Act 1901 and associated regulations. The exact penalties would be determined based on the nature and severity of the breach, in accordance with relevant customs legislation.