EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0506687
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.
Cigweld Pty Ltd applied for a TCO in respect of certain electrodes on 01 June 2005.
Instrument
TCO No 0506687 was made on 07 October 2005. It declares that those certain electrodes 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. 0506687 is taken to have come into force on 01 June 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 Australian Parliament, serves as the foundational legislation governing customs and border control in Australia. One notable instrument under this Act is Tariff Concession Order (TCO) No. 0506687, introduced to address the specific issue of tariff concessions for certain goods. This particular TCO, issued on 7 October 2005, provides a concession by reducing the customs duty on certain electrodes to zero, effective from 1 June 2005, the date the application was lodged. This order was made after a successful application by Cigweld Pty Ltd, ensuring that no substitutable goods were being produced in Australia, thus meeting the core criteria as outlined in the Customs Act. The policy objective here is to support Australian businesses by making certain imported goods more competitively priced, thereby fostering economic growth and efficiency within the industry.
Scope and Application
The Tariff Concession Instrument No. 0506687 under the Customs Act 1901 applies specifically to goods in respect of which a Tariff Concession Order (TCO) has been granted. This Act allows for the reduction or exemption of customs duty on certain goods, provided they meet specific criteria outlined in the legislation. The application of this instrument is confined to goods that are not specified as ineligible under section 269SJ of the Act and must be such that no substitutable goods are produced in Australia. The instrument is primarily concerned with facilitating trade by reducing the financial burden of customs duties on eligible imported goods. The application of this legislation is national, extending across the Commonwealth of Australia, and it is administered by the Chief Executive Officer of Customs. The instrument does not apply to goods that are specified as ineligible under the Act, and it does not retroactively affect the rights of any person, ensuring that it only confers benefits to importers of goods from the date the TCO is deemed to have come into force. The application of this Act can be further extended or defined through subordinate instruments, although the primary focus remains on the concession of customs duties for specific goods.
Key Provisions
The Customs Act 1901 (the Act) allows for the creation of Tariff Concession Orders (TCOs) through Part XVA, which can apply a lower rate of customs duty to specified goods. To apply for a TCO, a person must submit an application to the Chief Executive Officer of Customs (section 269F). If the application is not for goods that cannot be subject to a TCO (section 269SJ), the CEO will consider if it meets the core criteria, such as the absence of substitutable goods produced in Australia in the ordinary course of business (section 269C). If satisfied, the CEO issues a written order as a TCO, specifying the lower duty rate applicable to the goods (section 269P(3)).
The obligations imposed by the Act include the CEO's duty to evaluate the application against the core criteria and to publish a notice in the Gazette inviting submissions if the application is accepted as valid (subsection 269K(1)). The TCO must be made in writing and clearly specify the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods (subsection 269P(3)). Additionally, the Act ensures that the TCO does not affect the rights of any person adversely as of the date of registration and does not impose any liabilities on persons other than the Commonwealth (subsection 269S(1)).
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations could result in significant penalties. While the explanatory statement does not specify criminal or civil penalties for breaches, it is reasonable to infer that non-compliance could lead to legal consequences under the Act or related legislation. Penalties for breaches may include fines or imprisonment, depending on the severity and intent of the breach. The exact penalties would be determined by the courts and could vary based on individual circumstances.
The Tariff Concession Order No. 0506687, issued on 07 October 2005, declared that certain electrodes are subject to a lower rate of customs duty, specifically applying item 50 of Schedule 4 to the Customs Tariff Act 1995. This means that the general rate of duty, which is 5%, is reduced to free for these goods. This order came into effect on 01 June 2005, the date the application was lodged, as stipulated by the Act (subsection 269S(1)). The TCO benefits importers by potentially allowing them to apply for a refund of duty paid on these goods since the effective date of the TCO.