EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513658
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 Aluminium Extrusion Loading Skips on 7 October 2005.
Instrument
TCO No 0513658 was made on 3 January 2006. It declares that those certain Aluminium Extrusion Loading Skips 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. 0513658 is taken to have come into force on 7 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 Tariff Concession Instrument No. 0513658, enacted under the Customs Act 1901, addresses the problem of imposing lower customs duties on specific goods to encourage their importation, provided no substitutable goods are produced in Australia. This instrument was introduced to facilitate easier and cheaper access to certain goods by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that effectively reduce the duty on specified items. The policy objective, as stated, is to ensure that such concessions do not disadvantage any person and that they provide a beneficial impact on importers who can apply for refunds on duties already paid for goods imported since the TCO's effective date. The instrument came into force on the date the application was lodged, 7 October 2005, and no submissions were received in opposition to the concession.
Scope and Application
The Tariff Concession Instrument No. 0513658, under the Customs Act 1901, applies to any entity or person seeking tariff concessions for specific goods, in this case Aluminium Extrusion Loading Skips, provided the application complies with the core criteria set out in the Act. This Act operates within the Commonwealth jurisdiction and specifically targets the reduction of customs duty rates for goods that meet certain conditions, such as the absence of substitutable goods produced in Australia. The instrument extends its application to those entities or individuals who have applied for and been granted a tariff concession order by the Chief Executive Officer of Customs, following the satisfaction of the specified criteria. The scope of the Act is further defined by exclusions for goods specified in section 269SJ of the Act, which cannot be subject to a tariff concession order. The instrument's application can be extended or restricted through subordinate instruments, aligning with the overarching objectives and provisions of the Customs Act 1901.
Key Provisions
The primary operative sections of the Customs Act 1901, specifically as they relate to Tariff Concession Orders (TCOs), are sections 269C, 269F, 269P, and 269SJ (sections 269C, 269F, 269P, and 269SJ). Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO, provided the goods in question are not specified in section 269SJ, which lists goods ineligible for TCOs. If the CEO determines that the application meets the core criteria outlined in section 269C, they are required to issue a TCO under section 269P. This TCO specifies a lower rate of customs duty for the goods in question, as per the relevant item in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes certain obligations on the parties involved in the TCO process. For example, when a TCO application is accepted as valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be granted (subsection 269K(1)). If no submissions are received, the CEO proceeds to make the TCO. Furthermore, the CEO must ensure that the application meets the core criteria as per section 269C, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged.
Should any party breach the provisions of the Customs Act 1901, there are potential civil and criminal consequences. The Act does not specify particular penalties for breaches related to TCOs; however, general penalties for breaches of the Customs Act can include fines and imprisonment. For example, under section 241A of the Act, a person who commits an offence that carries a penalty may face a fine or imprisonment, or both, depending on the severity of the offence. The exact penalties depend on the specific breach and are determined by the courts.
The commencement of a TCO is effective from the day the application is lodged, as per subsection 269S(1) (subsection 269S(1)). This means that from the date of application, the goods in question are subject to the lower rate of duty specified in the TCO. Importantly, the TCO does not affect any existing rights or liabilities of persons other than the Commonwealth as of the date of registration, ensuring that no party is disadvantaged or incurs new liabilities due to the TCO. Importers of the affected goods can apply for a refund of duty paid on those goods from the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations.