EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0506655
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.
Consonic Pty Ltd applied for a TCO in respect of certain linear vibration welders on 31 May 2005.
Instrument
TCO No 0506655 was made on 07 October 2005. It declares that those certain linear vibration welders 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. 0506655 is taken to have come into force on 31 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, enacted by the Commonwealth Parliament, addresses the issue of applying tariffs to imported goods by providing a framework for Tariff Concession Orders (TCOs). These orders allow for reduced customs duties on specific goods, provided certain criteria are met. The Act empowers the Chief Executive Officer of Customs to make these orders, ensuring that the application process is both transparent and fair. The overarching policy objective is to promote competitive pricing and access to goods in the Australian market, which can enhance economic efficiency and consumer welfare by lowering the cost of imported goods.
The Tariff Concession Instrument No. 0506655, made under the Customs Act 1901, aims to provide tariff concessions for certain linear vibration welders. This instrument was introduced to address the specific application by Consonic Pty Ltd, ensuring that these goods benefit from reduced customs duties. The process involved assessing whether the goods in question were substitutable by Australian-produced items, which was determined to be not the case, thereby satisfying the core criteria for a TCO. The instrument was published in the Gazette, with no objections received, and it came into effect on the date the application was lodged.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Orders (TCOs) under Part XVA, applies to any person or entity seeking a reduction in customs duty on specific goods. This legislation allows the Chief Executive Officer of Customs to grant tariff concessions on goods that are not substitutable by products manufactured within Australia. The scope of the Act is primarily focused on the reduction of customs duty on imported goods under certain conditions, which can be particularly beneficial for industries that rely on importing specific machinery or equipment. The geographic reach of this legislation is national, applying throughout Australia and governed by the Commonwealth. It is important to note that the Act does not apply to goods specified in section 269SJ of the Customs Act, which outlines those goods that are ineligible for tariff concessions. The application of the Act may be further defined or restricted through subordinate instruments such as regulations or ministerial directions, which can specify additional conditions or criteria for tariff concessions.
Key Provisions
The main provisions of this legislation, found in sections 269C, 269B, 269D, 269E, 269P(3) and 269S(1) of the Customs Act 1901, detail the process for making Tariff Concession Orders (TCOs) and their effects. Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO regarding goods. Section 269C stipulates that an application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The definitions of "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269B, 269D, and 269E respectively. If the CEO is satisfied that the application meets the core criteria, they must issue a written TCO, as outlined in section 269P(3). Finally, subsection 269S(1) dictates that the TCO comes into force on the day the application was lodged.
The obligations and requirements imposed by the Act on the parties and entities it governs are primarily centred around the application process for TCOs. The CEO must ensure that the application is not for goods specified in section 269SJ, which cannot be subject to a TCO. Once the application is accepted as valid, the CEO must publish a notice in the Gazette inviting any interested parties to lodge a submission if they believe the TCO should not be made. The CEO is also responsible for determining whether the application meets the core criteria based on the information provided, and if so, issuing a TCO. Importers must be aware of the refund provisions under paragraph 126(1)(r) of the Regulations, which allow them to apply for a refund of duty on goods imported since the TCO came into force.
The legislation does not explicitly outline offences, penalties, or consequences for breach. However, it is implied that failure to comply with the provisions could result in the TCO not being issued or the application being rejected. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and it does not impose any liabilities on any person. Any breach of the Customs Act 1901 or associated regulations could result in civil or criminal penalties, but these are not detailed in the explanatory statement.