EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603417
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.
Castech Solutions Pty Ltd applied for a TCO in respect of certain excavator track shoes on 8 February 2006.
Instrument
TCO No 0603417 was made on 7 April 2006. It declares that those certain excavator track shoes 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. 0603417 is taken to have come into force on 8 February 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 Parliament of Australia, provides a framework for the regulation of customs and excise duties, including the establishment of a scheme under which Tariff Concession Orders (TCOs) may be made. These orders, when granted, allow for a lower rate of customs duty to apply to specified goods, facilitating trade and potentially reducing costs for importers. The problem or gap addressed by this legislation is the need to provide tariff concessions for imported goods under certain conditions, thereby encouraging trade and supporting economic objectives. The explanatory statement for Tariff Concession Instrument No. 0603417, made on 7 April 2006, exemplifies this process. In this instance, Castech Solutions Pty Ltd applied for a TCO for certain excavator track shoes, and the CEO was satisfied that no substitutable goods were produced in Australia, leading to a concession that reduced the duty rate from 5% to 0%. This instrument was introduced to provide a tariff concession without any submissions opposing the order, ensuring a smooth and effective implementation of the policy objective.
Scope and Application
The Customs Act 1901, through its Part XVA, provides a framework for the application of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). This legislation applies to individuals or entities seeking tariff concessions on specific goods, ensuring that the application of such concessions is subject to stringent criteria. A TCO can be applied for by any person who wishes to have a lower rate of customs duty applied to particular goods, provided these goods are not specified in section 269SJ of the Act, which lists goods ineligible for TCOs. The application process requires the CEO to assess whether the goods in question are substitutable by any goods produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F of the Act. If the CEO determines that no substitutable goods are produced in Australia, a TCO is issued, which specifies a lower rate of customs duty for the goods in question. The geographic reach of this legislation is national, as it applies across Australia under the Commonwealth’s customs jurisdiction. The TCOs do not impose any new liabilities or affect existing rights of parties other than the Commonwealth, ensuring that the application of the concessions does not disadvantage any person or entity.
Key Provisions
The main operative sections of this legislation (sections 269C, 269F, and 269P) allow for the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) for goods not produced in Australia in the ordinary course of business. Specifically, section 269F allows an application to be made for a TCO, and if the CEO is satisfied that the application meets the core criteria set out in section 269C, they must make a written order that declares the goods subject to the application to be eligible for a concession under Schedule 4 of the Customs Tariff Act 1995. For instance, TCO No. 0603417 was made for excavator track shoes, reducing the duty on these goods from 5% to 0%.
The obligations imposed by the Act on the parties it governs include the requirement for the CEO to assess whether the application for a TCO meets the core criteria, which include the condition that no substitutable goods are produced in Australia in the ordinary course of business (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made (subsection 269K(1)). In the case of TCO No. 0603417, the CEO did not receive any submissions. It is also the responsibility of the CEO to ensure that the rights of persons are not adversely affected by the making of a TCO, and to ensure that no new liabilities are imposed on any person.
Failure to comply with the requirements of the Customs Act 1901 can result in various civil or criminal consequences. For example, if a person knowingly makes a false statement in an application for a TCO, they may be subject to a penalty of up to five years imprisonment or a fine of up to $22,000 or both (section 274). Additionally, if a person knowingly contravenes any provision of the Customs Act 1901, they may be liable to pay a penalty of up to $22,000 (section 273). It is important for parties subject to this legislation to ensure that they comply with all requirements to avoid such penalties.