EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602847
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.
Minifab (Aust) Pty Ltd applied for a TCO in respect of certain hot embossers on 23 January 2006.
Instrument
TCO No 0602847 was made on 19 June 2006. It declares that those certain hot embossers 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. 0602847 is taken to have come into force on 23 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. 0602847 was enacted in 2006 under the Customs Act 1901 to address the issue of reducing the rate of customs duty for certain goods that are not produced in Australia and for which there are no substitutable goods manufactured domestically. This instrument was developed to provide relief to importers of specific goods by allowing them to apply for a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs, provided the goods meet the core criteria outlined in the Act. The policy objective is to facilitate trade by lowering the duty on imported goods, thereby making them more competitive and accessible in the Australian market. The instrument was introduced to ensure that no person, other than the Commonwealth, would be disadvantaged or have liabilities imposed on them due to the application of the TCO before its registration date. This legislative action seeks to streamline the importation process and support the economic efficiency of the import market.
Scope and Application
The Tariff Concession Instrument No. 0602847, made under the Customs Act 1901, applies to the particular hot embossers for which Minifab (Aust) Pty Ltd applied for a tariff concession order (TCO). This legislation specifically addresses the application and approval process for TCOs, which are orders that lower the rate of customs duty on certain imported goods. The Act applies to any person or entity that seeks to have a lower rate of customs duty applied to imported goods, provided those goods do not fall under the exclusions specified in section 269SJ of the Act. The process involves an application to the Chief Executive Officer of Customs (CEO), who must determine whether the application meets the core criteria outlined in the Act, such as the absence of substitutable goods produced in Australia. This instrument has a Commonwealth jurisdictional reach and its application is subject to the Customs Act 1901 and the Customs Tariff Act 1995. The TCO is effective from the date the application was lodged and does not affect any pre-existing rights or impose liabilities on persons other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0602847, under the Customs Act 1901, pertains to the reduction of customs duty for certain hot embossers. The key operative sections involved are sections 269C, 269B, 269D, 269E, and 269P of the Act, which together establish the criteria for issuing a Tariff Concession Order (TCO) (sections 269C, 269B, 269D, 269E, 269P). Section 269C requires 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. This is further clarified by section 269B, which defines terms such as 'goods produced in Australia,' 'ordinary course of business,' and'substitutable goods.' If the Chief Executive Officer of Customs (CEO) is satisfied that these criteria are met, a written order (TCO) must be made, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (subsection 269P(3)).
The obligations imposed on the parties or entities governed by this Act include the requirement for an applicant to ensure that the goods in question meet the specified criteria for a TCO. The CEO, upon receiving a valid application, must make a decision based on the information provided and the criteria set out in the Act (sections 269C, 269B, 269D, 269E, 269P). Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). This transparency ensures that all relevant parties have an opportunity to voice their concerns before the TCO is issued.
Regarding the consequences of breach, the Act does not specify any civil or criminal penalties for failing to comply with the provisions related to the TCO. However, any party that contravenes the terms of the TCO may face legal actions for non-compliance with the customs regulations, which could include penalties such as fines or other remedies available under the broader Customs Act 1901. The Act ensures that the rights of importers are beneficially affected and that they can apply for a refund of duty on goods imported since the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). The TCO itself does not impose any liabilities on any person, ensuring that only the intended beneficiaries of the concession benefit from the reduced duty rates.