EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603013
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.
Sun Metals Corporation applied for a TCO in respect of certain filter presses on 27 January 2006.
Instrument
TCO No 0603013 was made on 7 April 2006. It declares that those certain filter presses 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. 0603013 is taken to have come into force on 27 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 was enacted to provide for the regulation of imports and exports and the collection of duties and taxes. Part XVA of the Act facilitates the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs to provide tariff concessions on certain goods. The Tariff Concession Instrument No. 0603013 was introduced on 7 April 2006 to provide a tariff concession on certain filter presses, reducing the duty from 5% to free. The instrument was made in response to an application by Sun Metals Corporation, and after the CEO was satisfied that no substitutable goods were produced in Australia, as required by section 269C of the Act. The instrument was subject to an invitation for submissions pursuant to subsection 269K(1) of the Act, though none were received. The instrument came into force on 27 January 2006, the date the application was lodged, and does not affect the rights of persons as at the date of registration to their disadvantage nor impose any liabilities.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the application of Tariff Concession Orders (TCOs) which lower the rate of customs duty on specified goods. This legislative framework applies to any individual or entity that seeks to import goods for which a tariff concession might be beneficial, provided that the goods do not fall within the prohibited categories outlined in section 269SJ of the Act. The Act is applicable on a national level, affecting all imports into Australia. An application for a TCO can be made by any person to the Chief Executive Officer of Customs, subject to the condition that no substitutable goods are produced in Australia at the time of the application, as per sections 269C and 269D. Once the CEO determines that an application meets the core criteria, a TCO is issued, which specifies the reduced duty rate for the goods in question. The TCO does not disadvantage any person other than the Commonwealth and does not impose new liabilities on any person, including importers who can apply for a refund of duty under the Customs Act Regulations.
Key Provisions
The main operative sections of the Customs Act 1901, as detailed in the Explanatory Statement, include sections 269C, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. Section 269C outlines the core criteria that a TCO application must meet, particularly that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must make a TCO (section 269P(3)), which specifies that the goods in question will be subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, typically resulting in a reduced or free rate of customs duty. Section 269SJ lists goods that are ineligible for a TCO.
The obligations and requirements imposed by the Act on the parties or entities it governs include the necessity for applicants to ensure their TCO applications meet the core criteria as defined by sections 269C and 269D of the Customs Act. The CEO is required to publish a notice in the Gazette inviting submissions from any interested parties when a TCO application is accepted as valid, as per subsection 269K(1). Additionally, the CEO must decide whether the application meets the core criteria and, if satisfied, issue a TCO (section 269P(3)). Importers benefit from the TCO by potentially being able to apply for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.
In terms of penalties and consequences for breaches, the Explanatory Statement does not detail specific offences or penalties for non-compliance with the TCO provisions. However, general compliance with the Customs Act 1901 and associated regulations can lead to various civil and criminal consequences. For instance, wilful or negligent contraventions of the Customs Act can result in fines or imprisonment, as per the general penalties outlined in the Act. It is also pertinent to note that the TCO does not affect the rights of any person other than the Commonwealth, ensuring that no pre-existing rights or liabilities are adversely impacted by the issuance of a TCO.