EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602563
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.
Contech Engineering Pty Ltd applied for a TCO in respect of certain modular flexible conveyors on 19 January 2006.
Instrument
TCO No 0602563 was made on 7 April 2006. It declares that those certain modular flexible conveyors 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 0%.
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. 0602563 is taken to have come into force on 19 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 Australian Parliament, established a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders allow for a lower rate of customs duty on certain goods, provided that the application for the concession meets specific criteria. The Customs Tariff Concession Instrument No. 0602563, made on 7 April 2006, addresses a particular application by Contech Engineering Pty Ltd for a TCO concerning modular flexible conveyors. This instrument was introduced to ensure that the application complies with the Act's provisions, particularly the requirement that no substitutable goods are produced in Australia. The policy objective is to facilitate trade by reducing the duty burden on specific imported goods, thereby benefiting importers by potentially allowing them to claim refunds on duties paid before the TCO's effective date.
Scope and Application
The Customs Act 1901, as modified by Tariff Concession Instrument No. 0602563, facilitates the application of reduced customs duties on specific goods through Tariff Concession Orders (TCOs). This Act applies to any person or entity seeking to import goods that are eligible for a TCO. The primary focus of this legislation is on goods that are not produced domestically and can benefit from tariff concessions, thereby reducing the financial burden on importers and potentially stimulating market demand for these goods. The scope of this legislation is national, given its foundation under the Commonwealth's Customs Act 1901. The Act does not apply to goods specified in section 269SJ, which are excluded from tariff concessions. The application of this Act can be extended or restricted via subordinate instruments, such as regulations and orders, which provide further details on the application process and criteria for tariff concessions. The commencement of this particular TCO, effective from 19 January 2006, ensures that importers can benefit from the tariff reduction immediately upon the application date.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0602563 (F2006L01132) under the Customs Act 1901 focus on the application and implementation of a Tariff Concession Order (TCO). Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. If the application complies with the requirements set out in section 269SJ and meets the core criteria as per section 269C, the CEO must make a written order declaring the goods subject to the TCO. Section 269P(3) further mandates that if the CEO is satisfied that the application meets the core criteria, a TCO must be issued. In this particular case, the TCO No. 0602563 applies to certain modular flexible conveyors, granting them a 0% duty rate as opposed to the general rate of 5%.
The obligations imposed by the Act on parties and entities include ensuring that the goods for which a TCO is sought are not substitutable goods produced in Australia, as per section 269D and section 269E. The applicant must also adhere to the requirements of section 269SJ, which specifies the types of goods that cannot be subject to a TCO. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons against the issuance of the TCO, as per subsection 269K(1). In this instance, no submissions were received, and the TCO was issued on 7 April 2006.
Breaching the provisions of the Customs Act 1901 or the conditions set out in a TCO may result in legal consequences. While the explanatory statement does not explicitly detail specific offences, penalties, or consequences, the Act generally allows for civil and criminal penalties for breaches. Civil penalties could include fines, while criminal penalties could include imprisonment, depending on the severity of the breach. The exact penalties would be determined based on the specific breach and relevant provisions of the Customs Act 1901.