EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515067
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.
Fillon Technologies Australia Pty Ltd applied for a TCO in respect of certain Automotive Refinishing Paint Mixers Parts on 31 October 2005.
Instrument
TCO No 0515067 was made on 16 January 2006. It declares that those certain Automotive Refinishing Paint Mixers Parts 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. 0515067 is taken to have come into force on 31 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, establishes a framework for the regulation of customs and excise duties, and was supplemented by the introduction of Tariff Concession Orders (TCOs) through Part XVA to address specific economic or trade policy objectives. This mechanism allows the Chief Executive Officer of Customs to reduce the customs duty on certain imported goods, provided the application meets the core criteria outlined in the Act. The primary aim of this legislation is to encourage the importation of goods that are not domestically produced or where the domestic alternatives are not suitable substitutes, thereby facilitating trade and potentially lowering costs for businesses reliant on these imports. This approach was introduced to support competitive markets and ensure that Australian consumers and businesses have access to a wider range of goods at reduced costs, while also encouraging the development of local industries by ensuring that only truly necessary imports receive tariff concessions.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for Tariff Concession Orders (TCOs), which are instrumental in determining the rate of customs duty applicable to certain goods. This legislation applies to entities or individuals who wish to import goods into Australia and are seeking a lower rate of duty on those goods. The process involves an application to the Chief Executive Officer of Customs, who assesses whether the application meets the specified core criteria, primarily focusing on whether substitutable goods are produced in Australia. If the criteria are met, the CEO issues a TCO, which can reduce or eliminate the customs duty on the specified goods, as seen in TCO No. 0515067 for Automotive Refinishing Paint Mixers Parts. This legislative provision extends across the Commonwealth of Australia and affects the importation of goods, with no substitutable goods produced domestically.
The scope of the Customs Act 1901 in this context is inclusive of various industries that rely on the importation of specific goods, provided they comply with the statutory requirements. The Act’s application is national, impacting all states and territories within Australia. The instrument does not impose any new liabilities on individuals or entities and does not retroactively disadvantage anyone; it only affects the rights of importers beneficially by potentially entitling them to duty refunds on goods imported since the effective date of the TCO. The Act allows for the extension or restriction of its application through subordinate instruments, ensuring flexibility in its implementation.
Key Provisions
The primary sections of the Customs Act 1901 relevant to the Tariff Concession Instrument No. 0515067 include sections 269C, 269B, 269D, 269E, and 269P(3). These sections set out the criteria for making a Tariff Concession Order (TCO), defining terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. Specifically, Section 269C mandates that the Chief Executive Officer of Customs (CEO) must assess whether the application for a TCO meets the core criteria, which is satisfied if no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged (Section 269B). If these criteria are met, the CEO must make a TCO, as stipulated in Section 269P(3), which declares that the specified goods are subject to a lower rate of customs duty.
The obligations imposed by the Act on the parties involved are primarily on the CEO and the applicant. The CEO must ensure that the TCO application meets the core criteria before making the order. This involves verifying that no substitutable goods are produced in Australia at the time the application is made. The applicant must provide all necessary information and evidence to support the application. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as required by Section 269K(1). If no submissions are received, the CEO proceeds to make the TCO.
Breaches of the provisions in the Customs Act 1901 may result in civil or criminal consequences. While the specific penalties for non-compliance with TCO requirements are not detailed in the explanatory statement, under general provisions of the Act, penalties for providing false or misleading information in applications or for any other breach of the Act may include fines and, in severe cases, imprisonment. The exact penalties would depend on the specific nature and severity of the breach, as outlined in the broader provisions of the Customs Act 1901.