EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604621
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.
Wichard Pacific applied for a TCO in respect of certain manual reefers and or furlers on 1 March 2006.
Instrument
TCO No 0604621 was made on 19 May 2006. It declares that those certain manual reefers and or furlers 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. 0604621 is taken to have come into force on 1 March 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, establishes a framework for the application and administration of customs duties and includes provisions for Tariff Concession Orders (TCOs). These orders provide for a lower rate of customs duty on specified goods, provided certain criteria are met. This legislation was introduced to address the need for a streamlined process to reduce customs duties on goods that are not domestically produced, thereby encouraging import and use of such goods. The policy objective is to facilitate trade by reducing the cost of imported goods that are not produced within Australia, thus supporting economic efficiency and consumer benefit. Tariff Concession Instrument No. 0604621, made on 19 May 2006, exemplifies this process by granting a concession for certain manual reefers and furlers, reducing their duty rate to free, provided no substitutable goods were produced in Australia at the time of the application.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 0604621, applies to the process by which certain goods can receive tariff concessions, specifically benefiting the importer of those goods. This legislation pertains to individuals or entities that import specified goods, namely manual reefers and furlers in this instance, and allows for a reduced or free rate of customs duty under certain conditions. The geographic reach of this legislation is national, as it is enacted under the Commonwealth of Australia, but it directly affects the operations of importers within Australia. The Act excludes goods specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. The instrument extends the application of the Act by detailing the specific goods that qualify for a tariff concession under certain criteria, such as the absence of substitutable goods produced in Australia at the time of the application. The instrument also specifies the commencement date of the tariff concession, which is retroactive to the date the application was lodged, thereby ensuring that no existing liabilities are imposed on importers for transactions occurring prior to the instrument's registration.
Key Provisions
The Tariff Concession Instrument No. 0604621, made under the Customs Act 1901, focuses on the establishment of Tariff Concession Orders (TCOs) (s 269F). It provides that a lower rate of customs duty applies to goods specified in a TCO. Section 269C of the Act stipulates that for a TCO application to meet the core criteria, no substitutable goods should be produced in Australia in the ordinary course of business on the day the application is lodged (s 269C). If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, a written order, or TCO, must be made (s 269P(3)). In this case, the instrument was made on 19 May 2006, and it declares that certain manual reefers and or furlers are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, with a rate of duty of free instead of the general rate of 5% (s 269P(3)).
The obligations imposed by the Act on the parties include the requirement for the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid (s 269K(1)). This notice invites any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. In this instance, the CEO did not receive any submissions in response to the invitation. The TCO also ensures that the rights of persons (other than the Commonwealth) as at the date of registration are not disadvantaged or that no liabilities are imposed on any person in respect of anything done or omitted to be done before the date of registration (s 269S(1)). It is noted that the rights of importers will be beneficially affected under paragraph 126(1)(r) of the Regulations, which allows importers of such goods 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 Act does not specify any offences, penalties, or civil/criminal consequences for breach of the provisions in the Tariff Concession Instrument No. 0604621. However, it is essential to comply with the requirements set out in the Act to avoid any potential legal issues. The Act ensures that the process for making TCOs is transparent and allows for public submissions, which helps maintain fairness and accountability in the application process. The TCO itself does not impose any liabilities on any person and does not affect the rights of persons (other than the Commonwealth) as at the date of registration.