EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602268
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.
Cooltemp Pty Ltd applied for a TCO in respect of certain aluminium brazing foil on 13 January 2006.
Instrument
TCO No 0602268 was made on 24 March 2006. It declares that those certain aluminum brazing foil 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. 0602268 is taken to have come into force on 13 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 Tariff Concession Instrument No. 0602268 was enacted in 2006 under the Customs Act 1901 to address the need for tariff concessions on specific imported goods. The instrument was developed in response to an application from Cooltemp Pty Ltd for a Tariff Concession Order (TCO) concerning certain aluminium brazing foil, which was lodged with the Chief Executive Officer of Customs on 13 January 2006. The problem it was introduced to address is the facilitation of tariff concessions for goods where no substitutable goods are produced in Australia, thereby promoting fair trade and economic efficiency. The enacting body is the Parliament of Australia, with the policy objective being to support Australian businesses by providing them with access to competitively priced imported goods, thus enhancing their competitiveness in the market. The instrument was effective from the date the application was lodged and does not disadvantage any person or impose liabilities on any person in respect of anything done or omitted to be done before the date of registration.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This instrument applies to any person or entity that seeks a reduction in customs duty for specified goods by applying for a TCO. The process involves submitting an application to the CEO, who assesses whether the application meets core criteria such as the absence of substitutable goods produced in Australia in the ordinary course of business. If the application is approved, a TCO is issued, which specifies the lower duty rate applicable to the goods in question. The geographic scope of the Act is national, as it applies across Australia and is managed by the Commonwealth. There are exclusions, notably the goods listed in section 269SJ of the Act, which are ineligible for tariff concessions. The application of the Act can be extended or specified through subordinate instruments, such as the Customs Tariff Act 1995, which details the specific tariff items affected by TCOs. The TCOs, once issued, do not retroactively affect the rights of any person or impose liabilities for actions taken prior to the order's effective date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, provides the framework for Tariff Concession Orders (TCOs) that can be issued by the Chief Executive Officer of Customs (CEO). Section 269F allows a person to apply for a TCO in respect of goods. For the CEO to consider the application, it must not pertain to goods listed in section 269SJ, which are ineligible for a TCO. The application is subject to core criteria outlined in sections 269C and 269B, requiring the CEO to determine if no substitutable goods are produced in Australia at the time of application and if the goods are not already being produced domestically. If these criteria are met, the CEO must issue a TCO, specifying that the goods in question are subject to a prescribed rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995.
Upon acceptance of a TCO application, the CEO is mandated under subsection 269K(1) of the Act to publish a notice in the Gazette inviting submissions from any interested parties who may oppose the making of the TCO. In the case of TCO No. 0602268, no submissions were received in response to the published notice. The commencement date of a TCO, as stipulated in subsection 269S(1), is the day the application is lodged, which in this instance was 13 January 2006 for Cooltemp Pty Ltd's application regarding aluminium brazing foil. This date marks the effective start of the concession, with no retroactive effect on the rights or liabilities of any party other than the Commonwealth.
The obligations under this legislation include the CEO's responsibility to review applications against the core criteria and ensure no substitutable goods are being produced in Australia. Once a TCO is issued, it sets the duty rate for the specified goods, in this case, reducing the rate to free for the aluminium brazing foil. Importers have the right to apply for a refund of duties paid on these goods since the effective date of the TCO, which is beneficially aligned with the provisions under paragraph 126(1)(r) of the Regulations. Importantly, the legislation ensures that the TCO does not impose any new liabilities on individuals or entities, nor does it disadvantage anyone by affecting their rights as they stood on the registration date.
The Customs Act 1901 and its associated regulations do not explicitly state specific offences, penalties, or consequences for breaches related to the issuance or misuse of TCOs. However, any general breaches of customs regulations could potentially incur penalties under other sections of the Act, including fines and imprisonment. The primary focus of the legislation is on ensuring fair and transparent processes for the application and granting of tariff concessions, without imposing undue burdens or liabilities on the parties involved.