EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516778
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.
ADI Munitions Pty Limited applied for a TCO in respect of certain fuse cavity formers on 08 December 2005.
Instrument
TCO No 0516778 was made on 03 March 2006. It declares that those certain fuse cavity formers 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. 0516778 is taken to have come into force on 08 December 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. 0516778, enacted in 2006, pertains to the Customs Act 1901, aiming to provide tariff concessions for specific goods by the Chief Executive Officer of Customs. This instrument addresses the need to reduce customs duties for certain imported goods under specific conditions, facilitating trade and potentially benefiting economic sectors reliant on these imports. The instrument was introduced to streamline the process of applying for tariff concessions, ensuring that such concessions are granted when no substitutable goods are produced domestically, thereby promoting fair competition and economic efficiency.
The instrument was enacted by the relevant authority within the framework established by the Customs Act 1901, with a clear policy objective of enhancing trade by reducing the cost of importing specific goods. The Customs Act 1901 empowers the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which provide a lower rate of customs duty for certain goods if specific criteria are met. This legislative measure ensures that tariff concessions are only granted when justified, maintaining the balance between facilitating trade and protecting domestic industries.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This Act applies to any person or entity that wishes to apply for a TCO in respect of goods, provided that such goods are not specified in section 269SJ of the Act. The core criteria for an application to be considered successful are outlined in sections 269C, 269D, 269E, and 269F of the Act, which collectively ensure that the goods in question are not substitutable by Australian-produced goods and are not prohibited from TCO consideration. The instrument extends its application across the Commonwealth of Australia, impacting all jurisdictions within its borders. Notably, the legislation does not specify any exclusions, exemptions, or thresholds beyond what is stipulated in the Act. The application of the Act may be further refined or expanded through subordinate instruments, which can include regulations and further clarifications by the Chief Executive Officer of Customs.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0516778 under the Customs Act 1901 (section 269F) pertain to the application and approval process for Tariff Concession Orders (TCO). A TCO can be applied for by any person seeking to have a lower rate of customs duty applied to specific goods, provided these goods are not listed in section 269SJ of the Act. For an application to be considered, it must meet the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. This definition includes the concepts of "goods produced in Australia", "ordinary course of business", and "substitutable goods" as described in sections 269D, 269E, and 269P(3) respectively. Once the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they must make a written order declaring that the specified goods are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved primarily revolve around the application and approval process. The applicant must ensure that their application is made in accordance with the requirements of section 269C, and the CEO is obliged to review the application and make a determination based on whether it meets the core criteria. Furthermore, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made, as per section 269K(1). The Act ensures that the rights of existing parties, apart from the Commonwealth, are not adversely affected by the TCO, and it does not impose any new liabilities on these parties.
Breaches of the requirements set out in the Customs Act 1901 may result in both civil and criminal consequences. For instance, under section 269S(1), a TCO is deemed to come into effect on the day the application for the TCO was lodged, but any failure to comply with the conditions or obligations set out in the TCO could lead to penalties. While the specific penalties for non-compliance are not detailed in the explanatory statement, general penalties for breaches of the Customs Act can include fines and imprisonment, depending on the severity and intent of the breach. The precise penalties would need to be referred to under the broader Customs Act provisions and any relevant subsidiary legislation.
In summary, Tariff Concession Instrument No. 0516778, under the Customs Act 1901, facilitates the process for applying and approving TCOs to reduce customs duty on specific goods. The key requirements revolve around meeting the core criteria outlined in section 269C and ensuring that the application process is transparent and open to objections. The obligations primarily lie with the applicant to ensure their application is valid and with the CEO to review and approve the application. Non-compliance with the terms of the TCO could lead to civil or criminal penalties, although the specific penalties are not detailed in this explanatory statement.