EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516374
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.
Orica Australia Pty Ltd applied for a TCO in respect of a certain woodcare products manufacturing plant on 18 November 2005.
Instrument
TCO No 0516374 was made on 6 February 2006. It declares that the certain woodcare products manufacturing plant is a good 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. 0516374 is taken to have come into force on 18 November 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 was enacted by the Parliament of Australia to regulate the importation and exportation of goods, including the imposition and collection of customs duties. The Act was introduced to address the need for a comprehensive framework governing customs and border control in Australia. One of the key features of the Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which allows for the reduction or exemption of customs duties on specific goods under certain conditions. Enacted by the Australian Parliament, the Customs Act 1901 aims to facilitate trade while ensuring the appropriate collection of revenue through customs duties. The policy objective is to provide a mechanism for the Chief Executive Officer of Customs to grant tariff concessions on goods that are not produced in Australia, thereby promoting competitive trade practices and supporting industries reliant on imported inputs.
Scope and Application
The Tariff Concession Instrument No. 0516374 is a legislative instrument under the Customs Act 1901, specifically targeting the application of Tariff Concession Orders (TCOs) to certain goods. The Act applies to any person or entity seeking to import goods into Australia that are eligible for a TCO. These orders are designed to provide tariff concessions on goods that are not produced in Australia in the ordinary course of business, thereby encouraging the importation of these goods. The TCOs are made by the Chief Executive Officer of Customs (CEO) and apply to goods specified in the instrument, with the geographic scope being national as it pertains to the importation of goods into Australia. Exclusions from the application of TCOs include goods listed in section 269SJ of the Act, which are deemed not eligible for tariff concessions. The instrument extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the applicable tariff rates. The commencement of the TCO aligns with the date of the application, ensuring that the rights of importers are protected from any disadvantage or liability arising from actions taken prior to the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0516374 under the Customs Act 1901 applies a lower rate of customs duty to goods that are the subject of a Tariff Concession Order (TCO). Specifically, Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in Section 269SJ, which lists those goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria outlined in Section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business, a TCO is made. For instance, TCO No. 0516374, made on 6 February 2006, declared that a certain woodcare products manufacturing plant is a good to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, with the duty rate set at free, as opposed to the general rate of 5%.
The Customs Act 1901 imposes several obligations on the parties involved. Under Section 269K, 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. This ensures transparency and provides an opportunity for stakeholders to voice their concerns. In the case of TCO No. 0516374, no submissions were received. Additionally, the CEO is required to ensure that the application meets the core criteria as specified in Section 269C. The Act also stipulates that the TCO does not affect the rights of any person as at the date of registration in a way that would disadvantage them or impose liabilities for actions taken before the TCO registration date.
Failure to comply with the provisions of the Customs Act 1901 can lead to various consequences. While the Act does not explicitly detail offences or penalties, breaches of related provisions in the Customs Act or the Customs Regulations 1993 could result in civil or criminal penalties. For example, fraudulent claims or misrepresentations in applications for TCOs might be subject to penalties under the Crimes Act 1914, which could include fines and imprisonment. Importers can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations. However, any failure to comply with the conditions set out in the TCO or other relevant legislation could lead to financial penalties or other legal repercussions.