EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507661
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.
Inghams Enterprises Pty Ltd applied for a TCO in respect of certain Incubator Door Gas Springs on 22 June 2005.
Instrument
TCO No 0507661 was made on 2 September 2005. It declares that those certain Incubator Door Gas Springs 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 0%.
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. 0507661 is taken to have come into force on 22 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 Tariff Concession Instrument No. 0507661, enacted in 2005, addresses the need for a streamlined process to provide tariff concessions for specific goods, ensuring they are not produced domestically. This instrument was introduced under the Customs Act 1901, which empowers the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that lower customs duties on imported goods, provided certain criteria are met. This legislation aims to facilitate trade by reducing the cost of importing goods that are not locally produced, thereby supporting businesses that rely on these imports. The process ensures that the rights of importers are protected and that no existing liabilities are imposed retroactively. The instrument was developed following an application from Inghams Enterprises Pty Ltd for a tariff concession on Incubator Door Gas Springs, resulting in a zero per cent duty rate for these specific goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislative provision applies to entities or individuals who seek to import goods into Australia and can benefit from a reduced rate of customs duty. The Act applies to goods that are not produced in Australia in the ordinary course of business and are not subject to exclusions outlined in section 269SJ of the Act. The TCO mechanism is designed to support industries that rely on importing certain goods that are not domestically produced. Geographically, the Act operates under the Commonwealth jurisdiction, extending its reach across Australia. Exclusions to the application of TCOs are clearly defined to ensure that the concessions are not applicable to goods specified in section 269SJ. Any subordinate instruments or regulations further extend or clarify the application of the Act but do not alter the fundamental criteria for eligibility for a TCO. The process involves an application to the CEO, review of the core criteria, and a decision based on whether substitutable goods are produced in Australia, thereby determining the tariff concessions applicable to the goods in question.
Key Provisions
The Tariff Concession Instrument No. 0507661, under the Customs Act 1901, establishes a framework for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) (sections 269C, 269F, 269P). When a TCO is issued, it applies a reduced rate of customs duty to specific goods, in this case Incubator Door Gas Springs, as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). The general rate of duty on these goods is 5%, but the TCO reduces it to 0%.
Entities or individuals wishing to apply for a TCO must ensure their application meets the core criteria outlined in the Act. Specifically, the CEO must be satisfied that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). The terms 'substitutable goods' and 'ordinary course of business' are defined under sections 269D and 269E, respectively. If the CEO determines that the application meets these criteria, a TCO is issued, and the reduced duty rate is applied to the specified goods.
Upon accepting a valid TCO application, the CEO is required to publish a notice in the Gazette, inviting any person who may have objections to the TCO to lodge a submission (subsection 269K(1)). In the case of TCO No. 0507661, no submissions were received. The TCO is considered to have come into force on the date the application was lodged, which for this instrument, was 22 June 2005 (subsection 269S(1)). Importantly, the TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person (subsection 269S(1)).
In terms of enforcement, breaches of the provisions of the Customs Act 1901, including non-compliance with the terms of a TCO, may result in civil or criminal penalties. The specific penalties depend on the nature and severity of the breach but may include fines and imprisonment. The exact penalties are not detailed in the provided excerpt but are stipulated in other sections of the Act and related legislation.