EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602382
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.
Intercast and Forge Pty Ltd applied for a TCO in respect of certain foundry mould forming plant on 16 January 2006.
Instrument
TCO No 0602382 was made on 21 April 2006. It declares that those certain foundry mould forming plant 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. 0602382 is taken to have come into force on 16 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. 0602382, enacted in 2006, addresses the need for tariff concessions on certain foundry mould forming plant by reducing the customs duty to zero. This legislation operates under the Customs Act 1901, administered by the Parliament of Australia, and aims to facilitate the import of specified goods by granting tariff concessions where no substitutable goods are produced in Australia. The policy objective is to support the availability and affordability of these specific goods, potentially benefiting industries that rely on such equipment by lowering the cost of importation. The instrument was introduced following an application by Intercast and Forge Pty Ltd, and the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria for a tariff concession order. The instrument came into force on the date of application, 16 January 2006, without imposing any liabilities on persons other than the Commonwealth and allowing importers to apply for duty refunds on imports made since the effective date.
Scope and Application
The Tariff Concession Instrument No. 0602382, issued under the Customs Act 1901, applies to certain foundry mould forming plant, providing a lower rate of customs duty for these goods. Specifically, the instrument grants a tariff concession order (TCO) that declares these goods to be subject to a zero rate of duty as opposed to the general 5% duty rate. The Act applies to any person or entity seeking to import these specified goods into Australia, aiming to provide relief on customs duty for these particular items. The geographic reach of this legislation is national, as it pertains to the importation of goods into Australia and affects all states and territories. There are exclusions where the goods specified in section 269SJ of the Act are concerned, which are not eligible for such tariff concessions. The application of the Act can be further extended or restricted through subordinate instruments, allowing for the dynamic management of tariff concessions in response to changing economic or industry conditions.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0602382 under the Customs Act 1901 are Sections 269C, 269F, 269P, and 269S. Section 269F permits an application to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods, provided that the goods are not specified in section 269SJ. Section 269C sets out the core criteria that must be met for a TCO application to be accepted, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, Section 269P(3) mandates that the CEO must make a written TCO declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties or entities it governs include the requirement for the CEO to ensure that applications for TCOs are assessed against the core criteria specified in Section 269C. Specifically, the CEO must verify that no substitutable goods were produced in Australia at the time the application was made. Additionally, under Section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be granted. In this case, the CEO published a notice but did not receive any submissions. Furthermore, Section 269S(1) dictates that a TCO comes into force on the day the application is lodged, which in this instance was 16 January 2006.
Any breach of the obligations outlined in the Act may result in civil or criminal consequences. For instance, if the CEO fails to properly assess an application against the core criteria, or if incorrect information is provided in the application, there could be legal repercussions. The Act does not specify particular offences or penalties for such breaches but implies that non-compliance could lead to the invalidation of the TCO, which could then expose the applicant to the full customs duty rates. Additionally, the Act ensures that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, ensuring that no one is disadvantaged or imposed with liabilities for actions taken before the TCO registration date.