EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513533
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.
Almax Aluminium Pty Ltd applied for a TCO in respect of certain Water Quenchers on 6 October 2005.
Instrument
TCO No 0513533 was made on 3 January 2006. It declares that those certain Water Quenchers 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. 0513533 is taken to have come into force on 6 October 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, provides the legislative framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). The primary problem this legislation addresses is the need for a mechanism to reduce customs duty on specific goods that are not produced in Australia, thereby encouraging imports of these goods. The Tariff Concession Instrument No. 0513533, made on 3 January 2006, exemplifies the application of this framework, specifically concerning Almax Aluminium Pty Ltd's application for a TCO on certain Water Quenchers, reducing their duty from 5% to 0%. This was done after the CEO determined that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in the Customs Act. The policy objective of this measure is to facilitate the import of goods that are not domestically produced, potentially lowering costs for consumers and businesses reliant on these imports.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the application for Tariff Concession Orders (TCOs) by individuals or entities seeking reduced customs duty rates for certain goods. This provision applies to anyone who meets the criteria outlined in the Act and submits an application to the Chief Executive Officer of Customs. The application process is stringent, requiring that the goods in question are not already produced in Australia and do not have substitutable goods locally available. Once the CEO is satisfied that the application meets the core criteria, a TCO is issued, effectively lowering the customs duty rate for the specified goods. The TCO’s geographic reach is national, impacting all importers across Australia. The Act allows for the extension or restriction of its application through subordinate instruments, ensuring flexibility in its implementation. Notably, the TCO does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth, safeguarding the interests of those who have already imported goods before the TCO was registered.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0513533 under the Customs Act 1901 pertain to the application and approval process for Tariff Concession Orders (TCOs). Section 269F allows for applications to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application does not involve goods specified in section 269SJ, which are ineligible for a TCO, they must then assess whether the application meets the core criteria outlined in section 269C. If no substitutable goods were produced in Australia on the day the application was lodged, the application is deemed to meet these criteria, and a TCO can be issued.
The Act imposes several obligations on parties applying for a TCO. Firstly, the applicant must ensure that the goods in question are not specified in section 269SJ. Secondly, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made. This notice is required as soon as practicable after accepting the application as valid, as per subsection 269K(1). If no submissions are received, the CEO can proceed to make the TCO.
The Act also outlines the consequences for breaches of its provisions, although specific offences and penalties related to TCOs are not detailed in the explanatory statement. Generally, under the Customs Act 1901, breaches of customs laws can lead to both civil and criminal penalties. Civil penalties can include financial penalties and the confiscation of goods, while criminal penalties can result in fines and imprisonment. However, the explanatory statement does not specify the maximum penalties for breaches in the context of TCOs.
The Tariff Concession Instrument No. 0513533 is designed to benefit importers by allowing them to apply for a refund of duty on goods imported since the TCO is taken to have come into force. Importantly, the TCO does not affect the rights of any person, other than the Commonwealth, in a manner that disadvantages them or imposes liabilities for actions taken before the date of registration. This ensures that the rights of importers are beneficially affected without retroactive penalties.