EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604657
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.
Simplot Australia Pty Ltd applied for a TCO in respect of certain spray applicators on 6 March 2006.
Instrument
TCO No 0604657 was made on 5 May 2006. It declares that those certain spray applicators 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. 0604657 is taken to have come into force on 6 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 Commonwealth Parliament, provides a framework for the regulation of customs duties, including the ability to grant tariff concessions on certain goods. The act was introduced to address the need for flexibility in the application of customs duties, allowing for reduced tariffs where appropriate to encourage trade and economic growth. One such mechanism is the Tariff Concession Order (TCO), which allows for a lower rate of customs duty on specified goods. The Tariff Concession Instrument No. 0604657 was created to address a specific application by Simplot Australia Pty Ltd for tariff concessions on certain spray applicators. This instrument declares that these goods are subject to a zero percent duty rate, down from the general rate of five percent, as no substitutable goods were produced in Australia at the time of the application. The objective of this concession is to facilitate trade by reducing the cost of importing these specific goods, thereby potentially lowering prices for consumers and supporting businesses that rely on these imports.
Scope and Application
The Tariff Concession Instrument No. 0604657, made under section 269F of the Customs Act 1901, applies to specific spray applicators that are the subject of an application for a Tariff Concession Order (TCO). This Act, administered by the Chief Executive Officer of Customs, facilitates the reduction of customs duty on goods, provided they meet certain criteria as outlined in the Act. The scope of the Act is directed towards goods that are not substitutable by any products manufactured within Australia, as per sections 269C and 269D. This instrument extends to any entity or individual involved in the importation of these particular spray applicators, with the overarching aim of promoting trade by reducing financial burdens on importers. The geographic reach of the Act is national, applying across Australia, and its commencement date aligns with the date of the TCO application, 6 March 2006. The Act does not impose any new liabilities or disadvantages on persons other than the Commonwealth and allows for potential refunds of duty paid on imported goods since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation, particularly sections 269C, 269B, and 269P of the Customs Act 1901, establish a framework for the creation of Tariff Concession Orders (TCOs). These sections outline the criteria that must be met for a TCO to be granted, and the process by which the Chief Executive Officer of Customs (CEO) must assess and make these orders. Specifically, section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. This criterion is further defined by sections 269B and 269D, which explain what constitutes 'goods produced in Australia' and 'ordinary course of business', respectively. If the CEO is satisfied that these criteria are met, section 269P(3) mandates that a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies must be issued.
The obligations and requirements imposed by this Act on parties and entities it governs include the duty of the CEO to assess applications for TCOs against the core criteria set out in the Act. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why a TCO should not be made, as per subsection 269K(1) of the Act. Furthermore, once a TCO is issued, it is to be treated as coming into force on the date the application was lodged, as per subsection 269S(1) of the Act. Additionally, any person who considers that the TCO should not proceed has the opportunity to lodge a submission with the CEO.
The Act also includes provisions regarding offences, penalties, and consequences for breaches. Although specific penalties are not outlined in the explanatory statement, it is implied that failure to comply with the provisions of the Act or the terms of a TCO could result in civil or criminal consequences. Such consequences typically include fines and, in more severe cases, imprisonment, as generally provided under Australian law for breaches of customs regulations. The maximum penalties would depend on the specific nature and severity of the breach, as well as any applicable provisions in related legislation.