EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603549
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.
G James Australia Pty Ltd applied for a TCO in respect of certain anodising line loading and unloading stations on 8 February 2006.
Instrument
TCO No 0603549 was made on 21 April 2006. It declares that those certain anodising line loading and unloading stations 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. 0603549 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 was amended to include the scheme for Tariff Concession Orders (TCOs) to address the need for a mechanism to reduce customs duty on specific imported goods under certain conditions. Enacted by the Australian Parliament, the Act empowers the Chief Executive Officer of Customs to make TCOs that apply a lower rate of customs duty to specified goods if certain criteria are met. Specifically, a TCO can be made if the goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO, and if no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. This legislative framework aims to facilitate trade by providing tariff relief to importers who can demonstrate that no Australian-produced alternatives exist for the goods they seek to import.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0603549, facilitates the application of reduced customs duties on specific imported goods, provided these goods meet certain criteria set out in the Act. The legislation applies to any person or entity seeking to import goods that are eligible for a Tariff Concession Order (TCO) under the Customs Act, as long as the goods do not fall under the exclusions specified in section 269SJ. The geographic reach of this legislation is national, impacting importers across Australia. A TCO can be applied for by any individual or entity, and the Chief Executive Officer of Customs will consider the application if it pertains to goods not excluded under the Act and meets the core criteria, including the absence of substitutable goods produced in Australia. The instrument extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the tariff items applicable to goods subject to a TCO. There are no reported exclusions or exemptions detailed in the explanatory statement beyond those specified under section 269SJ of the Customs Act.
Key Provisions
The Customs Act 1901 (section 269C) mandates that the Chief Executive Officer of Customs (CEO) must evaluate whether an application for a Tariff Concession Order (TCO) meets the core criteria. According to section 269C, the application will meet these criteria if, on the day it was lodged, there were no substitutable goods produced in Australia in the ordinary course of business. Substitutable goods are defined by section 269D as goods produced in Australia that can be used in the same way as the goods for which the TCO is being applied (section 269E). If the CEO is satisfied that the application meets these criteria, they must make a written order declaring the goods in question to be subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). This particular TCO, Instrument No. 0603549, was made on 21 April 2006, declaring that certain anodising line loading and unloading stations are subject to item 50 of Schedule 4, with a resulting duty rate of free, down from the general rate of 5%.
Under the Customs Act 1901, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). In this case, no submissions were received in response to the published notice. The TCO is taken to have come into force on the date the application was lodged, which was 8 February 2006 (subsection 269S(1)). Importantly, the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, so as to disadvantage that person or impose any liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. Importers of the goods will benefit from the rights established under the TCO, and under paragraph 126(1)(r) of the Regulations, they can apply for a refund of duty on goods imported since the TCO came into force.
Failure to comply with the provisions of the Customs Act 1901, including the requirements for making a Tariff Concession Order, can lead to a range of civil and criminal consequences. Subsection 269H(2) of the Act states that the CEO may cancel a TCO if they are satisfied that the order was made in error. Such an action would be a response to a breach of the Act’s provisions. Additionally, any person found to have contravened the Act or Regulations may face penalties as outlined in the relevant sections of the Customs Act 1901 and associated regulations. For instance, section 126 of the Act provides for various offences, including knowingly making a false statement or representation, and penalties can include substantial fines and, in some cases, imprisonment. The specific penalties depend on the nature and severity of the breach.