EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603872
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.
Specialised Pressure Cleaning Pty Ltd applied for a TCO in respect of certain tunnel washers on 15 February 2006.
Instrument
TCO No 0603872 was made on 28 April 2006. It declares that those certain tunnel washers 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. 0603872 is taken to have come into force on 15 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 enacted by the Australian Parliament to establish the framework for customs regulations and duties. Part XVA of the Customs Act 1901 provides for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which allow for a lower rate of customs duty on specified goods. This legislative instrument aims to address economic competitiveness and industry support by providing tariff relief where appropriate, ensuring that Australian industries are not unduly burdened by customs duties on goods for which there are no suitable Australian-produced alternatives. The Tariff Concession Instrument No. 0603872, enacted in 2006, was made under this authority to provide a zero percent duty rate on certain tunnel washers, recognising that no substitutable goods were produced in Australia at the time of the application. The instrument came into effect on the date the application was lodged, 15 February 2006, and does not impose any liabilities on any person, thereby ensuring that the rights of importers are beneficially affected.
Scope and Application
The Tariff Concession Instrument No. 0603872 under the Customs Act 1901 applies specifically to goods for which a Tariff Concession Order (TCO) has been requested and granted by the Chief Executive Officer of Customs. This legislative instrument pertains to entities or individuals who are involved in the importation of specified goods, in this case, certain tunnel washers, which are subject to reduced customs duty rates as outlined in Schedule 4 of the Customs Tariff Act 1995. The geographic reach of this legislation is nationwide, as it falls under the Commonwealth jurisdiction, impacting all importers across Australia. The Act excludes certain goods specified under section 269SJ from being eligible for a TCO. The scope of the Act can be extended or modified through subordinate instruments, as indicated by the process for making TCOs. The TCO No. 0603872 came into force on the date of the application, 15 February 2006, and has no retrospective effect, thereby not affecting any rights or imposing liabilities for actions prior to its enactment. Importers of the affected goods, however, may benefit from the ability to apply for a refund of duty from the effective date of the TCO.
Key Provisions
The key operative sections of the Customs Act 1901, as modified by Tariff Concession Instrument No. 0603872, include section 269F, which allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods (section 269F). If the application is not for goods specified in section 269SJ, which are ineligible for a TCO, the CEO must determine whether the application meets the core criteria outlined in section 269C. If satisfied, the CEO must make a TCO under section 269P(3).
The Act imposes obligations on applicants to ensure their applications are valid and on the CEO to assess applications against the core criteria and to publish notices in the Gazette inviting submissions if necessary (section 269K(1)). Specialised Pressure Cleaning Pty Ltd, for instance, applied for a TCO for certain tunnel washers on 15 February 2006, and the CEO was satisfied that no substitutable goods were produced in Australia on the application date. Consequently, a TCO was made on 28 April 2006, effective from 15 February 2006 (section 269S(1)). The TCO stipulates that the tunnel washers are subject to a 0% duty rate instead of the general 5% rate (item 50 of Schedule 4 to the Customs Tariff Act 1995).
For breaches of the requirements set out in the Customs Act 1901 and associated regulations, various penalties and consequences may apply. Offences under the Act can lead to both civil and criminal penalties, depending on the nature and severity of the breach. For example, knowingly making a false statement or representation can result in fines or imprisonment. Under section 236 of the Act, the maximum penalty for a civil penalty is $22,200 for a corporation and $4,440 for an individual. For criminal offences, the maximum penalties can be significantly higher, with fines and imprisonment terms varying based on the specific provisions breached and the circumstances of the offence.
In summary, the legislation sets clear criteria for the application and approval of Tariff Concession Orders, imposes specific obligations on both applicants and the CEO, and outlines the effective date of such orders. It also provides for the publication of notices and invitations for submissions, as well as the potential for civil and criminal penalties for non-compliance. The TCO in question benefits importers by reducing the duty on certain tunnel washers to 0%, effective from the date of application.