EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602225
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 seed packing line on 11 January 2006.
Instrument
TCO No 0602225 was made on 17 March 2006. It declares that those certain seed packing lines 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. 0602225 is taken to have come into force on 11 January 2006.
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 Parliament of Australia, facilitates the establishment of Tariff Concession Orders (TCOs) to provide lower rates of customs duty on specific goods. The problem this legislation addresses is the potential economic disadvantage to businesses that import goods for which no locally produced substitutes exist, thereby encouraging competitive imports and potentially lowering consumer prices. The instrument in question, Tariff Concession Instrument No. 0602225, was introduced on 17 March 2006, following an application by Orica Australia Pty Ltd for a TCO on a certain seed packing line. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thus satisfying the core criteria for a TCO under section 269C of the Act. Consequently, the TCO reduced the duty on these specific seed packing lines from 5% to free. The instrument was published in the Gazette with no objections received, and it came into effect on the date of the application, 11 January 2006. This measure is intended to benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines a scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking to import goods into Australia and is subject to the criteria set forth in sections 269C and 269F. These sections determine the eligibility of goods for a TCO based on whether substitutable goods are produced in Australia and the ordinary course of business. The geographic reach of this legislation extends nationally, applying to all states and territories within Australia. Exclusions are noted in section 269SJ, which specifies goods that cannot be subject to a TCO. The Act’s application can be extended or restricted through subordinate instruments, such as those detailed in Schedule 4 of the Customs Tariff Act 1995, which provides the prescribed rates of duty. The explanatory statement for Tariff Concession Instrument No. 0602225, made on 17 March 2006, exemplifies this process by applying to a specific seed packing line and granting it a free rate of duty, effective from the date of the application, 11 January 2006.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0602225, as referenced in the Customs Act 1901, focus on the establishment and effect of Tariff Concession Orders (TCOs). Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, while section 269C outlines the core criteria that must be satisfied for such an order to be made. Specifically, section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Additionally, section 269P(3) mandates that if the CEO is satisfied with the application, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. The CEO must ensure that the application for a TCO is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. The CEO must also decide whether the application meets the core criteria outlined in section 269C. Furthermore, subsection 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties once an application is accepted as valid. Should the CEO receive no submissions, the TCO can proceed without opposition.
In terms of consequences for non-compliance, the Customs Act 1901 does not explicitly list offences or penalties related to breaches of TCO provisions within the provided text. However, any failure to comply with the requirements or misuse of the TCO could potentially lead to civil or criminal liability, depending on the specific circumstances and any other relevant legislation. The TCO itself does not impose any liabilities on any person, as stated under the relevant subsections.