EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603135
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.
Alcan Gove Development Pty Ltd applied for a TCO in respect of certain textile reinforced conveyors on 27 January 2006.
Instrument
TCO No 0603135 was made on 7 April 2006. It declares that those certain textile reinforced 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. 0603135 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 Tariff Concession Instrument No. 0603135, enacted under the Customs Act 1901, was introduced to address the need for a streamlined process in granting tariff concessions for specific goods, ensuring that businesses are not unduly burdened by customs duties when no Australian-made alternatives exist. This instrument was developed in response to an application by Alcan Gove Development Pty Ltd for a tariff concession order (TCO) regarding certain textile reinforced conveyors. The objective of this legislation is to provide a mechanism whereby the Chief Executive Officer of Customs can reduce or eliminate customs duty on goods where there are no substitutable goods produced in Australia, thus fostering a competitive environment that benefits both businesses and consumers.
This instrument was enacted by the relevant legislature to facilitate the Customs Act 1901's objective of ensuring that Australian industries are protected while also promoting fair trade practices. By granting this tariff concession, the rights of importers are positively impacted, allowing them to apply for duty refunds on imports made since the TCO came into effect on 27 January 2006. Importantly, the legislation ensures that no existing rights or liabilities are adversely affected, thereby maintaining legal certainty and fairness in the application of customs duties.
Scope and Application
The Tariff Concession Instrument No. 0603135, which was made under the Customs Act 1901, applies to certain textile reinforced conveyors as specified in the instrument. The Act allows for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that provide for a lower rate of customs duty on goods, provided the application meets specific core criteria. In this case, the CEO was satisfied that no substitutable goods were produced in Australia at the time of the application, thus permitting the concession. The Act applies to any person or entity seeking to import the specified goods, and the geographic reach is effectively national, as the Customs Act 1901 operates throughout Australia. The application of the TCO is contingent on the goods being imported and not on the entity or individual importing them. The TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO came into force, which is deemed to be the date the application was lodged. The TCO benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the concession.
Key Provisions
The Tariff Concession Instrument No. 0603135, under the Customs Act 1901, pertains to the issuance of a Tariff Concession Order (TCO) that reduces the customs duty on certain goods, specifically textile reinforced conveyors, from the general rate of 5% to 0%. This concession is contingent on the Chief Executive Officer (CEO) of Customs being satisfied that no substitutable goods are produced in Australia in the ordinary course of business at the time the application was lodged (sections 269C, 269D, 269E, and 269P(3)). The CEO must make a written order declaring the goods eligible for the lower duty rate if the application meets these core criteria.
The obligations imposed by the Act require the CEO to evaluate applications for TCOs and ensure that the applications do not pertain to goods specified in section 269SJ, which are ineligible for TCOs. The CEO must also publish a notice in the Gazette inviting public submissions regarding the TCO application and consider any submissions received (subsection 269K(1)). In this case, no submissions were received, facilitating the CEO’s decision to proceed with the TCO.
For breaches of the Act or its provisions, including any misuse of the TCO, there are potential civil and criminal consequences. However, the Explanatory Statement does not detail specific offences or penalties. Generally, under the Customs Act, penalties for non-compliance can include fines and imprisonment, depending on the severity and intent of the breach. The exact penalties would be determined by the specific breach and relevant sections of the Act or associated regulations.
The TCO does not retroactively disadvantage any person other than the Commonwealth nor impose new liabilities on any person for actions taken before the TCO's effective date. It is designed to benefit importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date, which is the date the application was lodged (27 January 2006) according to subsection 269S(1). This provision ensures that the rights of importers are protected and that they can benefit from the reduced duty rate applicable to the specified goods.