EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510206
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.
Flemings Plastics Dynamics Pty Ltd applied for a TCO in respect of certain metal separators on 04 August 2005.
Instrument
TCO No 0510206 was made on 14 October 2005. It declares that those certain metal separators 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. 0510206 is taken to have come into force on 04 August 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 Parliament of Australia, addresses the need for a structured approach to tariff concessions by establishing a framework under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. This Act allows for a lower rate of customs duty on goods that are the subject of a TCO, provided the goods are not specified as ineligible under section 269SJ and meet the core criteria outlined in section 269C. The policy objective behind this legislation is to facilitate trade by reducing the duty burden on specific goods, encouraging importation and local production where feasible alternatives do not exist. This approach is intended to benefit importers by potentially lowering their duty costs and to stimulate economic activity by making imported goods more competitively priced. The Customs Act 1901 thus provides a mechanism to balance trade facilitation with the protection of local industries.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for Tariff Concession Orders (TCOs) that may be issued by the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty on certain goods. This legislation applies to individuals or entities that may apply for a TCO concerning goods not specified in section 269SJ of the Act, which excludes certain goods from tariff concession eligibility. The application process requires that no substitutable goods, meaning those produced in Australia and suitable for the same use as the goods in question, are available in the ordinary course of business on the day the application is lodged. The CEO's decision to issue a TCO is contingent on satisfying these core criteria, and once a TCO is issued, it comes into effect on the date the application was lodged, as per section 269S(1) of the Act. This legislation is applicable on a national level within Australia, and its application may be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995. Notably, the TCO does not adversely affect the rights of any person other than the Commonwealth or impose liabilities on anyone for actions taken prior to the TCO's registration.
Key Provisions
The main operative sections of this legislation (sections 269C, 269B, 269E, 269D, 269P, and 269F of the Customs Act 1901) establish the framework for the creation and enforcement of Tariff Concession Orders (TCOs). Section 269F allows for the application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. Section 269C stipulates that an application will meet the core criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. This criterion is further defined by sections 269B, 269D, and 269E, which respectively define "goods produced in Australia," "ordinary course of business," and "substitutable goods." Once the CEO is satisfied that the application meets the core criteria as per section 269C, they are required under section 269P to make a written order declaring that the specified goods are subject to a prescribed tariff concession.
The obligations imposed by the Act on the parties include the requirement for applicants to ensure their applications meet the criteria set out in section 269C. The CEO has the obligation to assess whether the application meets these criteria, make a written order if they are satisfied, and publish a notice in the Gazette inviting submissions from any interested parties. Additionally, the CEO must not make a TCO if the goods are specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The Act also imposes obligations on the CEO to consider any submissions received in response to the Gazette notice.
The legislation sets out various consequences for breaches. While specific offences and penalties are not detailed within this explanatory statement, the Customs Act 1901 and associated regulations would likely outline penalties for non-compliance with the tariff concession scheme. Typically, breaches of customs regulations can lead to substantial financial penalties and potential criminal charges depending on the severity and intent behind the breach. It is essential for parties involved to adhere strictly to the requirements and obligations set out in the Act to avoid these consequences. The precise penalties and legal ramifications would be detailed in the relevant sections of the Customs Act 1901 and the Customs Regulations.