EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516786
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.
Alcan Gove Development Pty Limited applied for a TCO in respect of certain precipitation plant tanks on 09 December 2005.
Instrument
TCO No 0516786 was made on 10 March 2006. It declares that those certain precipitation plant tanks 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. 0516786 is taken to have come into force on 09 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. 0516786, enacted in 2006, was introduced to address a specific gap identified in the Customs Act 1901 concerning the application of lower customs duty rates on certain goods. This instrument was developed in response to an application by Alcan Gove Development Pty Limited for tariff concessions on certain precipitation plant tanks, which were not being produced in Australia at the time. The legislation enables the Chief Executive Officer of Customs to grant these concessions if no substitutable goods are produced domestically, thereby encouraging the importation of necessary goods while protecting local industries from undue competition. The instrument aims to provide tariff relief for the specified goods, facilitating their importation and use without imposing new liabilities on individuals or entities, while ensuring that the rights of importers are protected and potentially benefiting them with duty refunds.
Scope and Application
The Tariff Concession Instrument No. 0516786 under the Customs Act 1901 applies to specific goods for which an application has been made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). The instrument concerns Alcan Gove Development Pty Limited's application for certain precipitation plant tanks, where the CEO determined that no substitutable goods were produced in Australia in the ordinary course of business. Consequently, the TCO applies a zero rate of customs duty on these goods, down from the general rate of 5%. The TCO specifically addresses the geographic reach of the Commonwealth, impacting imports of these goods into Australia. The application of the TCO is confined to the particular goods specified in the instrument and does not extend to other goods or industries unless they similarly meet the criteria and apply for a TCO. The Act allows for exclusions and exemptions, notably for goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. Furthermore, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO's registration date.
Key Provisions
The Customs Act 1901, under section 269F (1), allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). This order permits a lower rate of customs duty on specified goods, provided the application does not relate to goods outlined in section 269SJ, which are ineligible for TCOs. Section 269C requires that for a TCO application to meet the core criteria, on the day of application, no substitutable goods should be produced in Australia in the ordinary course of business. The definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the CEO determines that the application meets the core criteria, they must issue a written order under section 269P(3), declaring the goods subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, thereby granting tariff concessions.
The obligations under this Act require the CEO to assess TCO applications against the core criteria and decide whether to issue a TCO based on the absence of substitutable goods produced in Australia. If a TCO is issued, the CEO must also publish a notice in the Gazette under subsection 269K(1), inviting any interested parties to submit objections. In this instance, no submissions were received. The TCO, as per subsection 269S(1), is effective from the date the application was lodged, which for TCO No. 0516786 was 09 December 2005. Importantly, the TCO does not retroactively disadvantage any person or impose liabilities for actions prior to its registration. Importers stand to benefit from this order, as they can apply for duty refunds for goods imported since the effective date under paragraph 126(1)(r) of the Regulations.
In terms of potential breaches and consequences, the Act does not explicitly detail offences or penalties for non-compliance with the TCO provisions. However, general compliance with Australian legislation could result in civil or criminal consequences if provisions are breached, including fines and imprisonment. For instance, knowingly importing goods without proper duty payments could lead to criminal penalties. It is important to note that the specific penalties for breaches related to TCOs are not outlined in the provided text, but they would typically align with the broader regulatory framework governing customs duties and imports.