EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604834
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.
Alcan Gove Development Ltd applied for a TCO in respect of certain airlift blowers on 6 March 2006.
Instrument
TCO No 0604834 was made on 19 May 2006. It declares that those certain airlift blowers 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. 0604834 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 was enacted by the Australian Parliament to regulate the import and export of goods into and out of Australia. The Act provides a framework for the administration of customs duties and other import charges, and includes provisions for the granting of tariff concessions. Tariff Concession Orders (TCOs) were introduced under Part XVA of the Customs Act to provide a mechanism by which the Chief Executive Officer of Customs could reduce the rate of customs duty on certain goods. The policy objective of the TCO scheme is to promote economic efficiency and to support Australian industries by reducing the cost of imported goods that have no local substitute. In the case of Tariff Concession Instrument No. 0604834, the CEO determined that no substitutable goods were produced in Australia in the ordinary course of business for certain airlift blowers, and therefore made a TCO granting a concession on the rate of duty for these goods.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This act applies to individuals and entities seeking lower customs duty rates on goods through the application for a TCO. The application process requires that the goods in question are not specified in section 269SJ of the Act and meet the core criteria as stipulated in section 269C. These criteria require that no substitutable goods are produced in Australia at the time of application, with definitions for key terms provided in sections 269D, 269E, and 269F. The Act's application extends nationally, affecting all goods entering Australia subject to customs duties. However, it excludes certain goods outlined in section 269SJ and imposes no liabilities or disadvantages to persons other than the Commonwealth for actions taken prior to the order's registration. Subordinate instruments may further detail the application and scope of the TCOs.
Key Provisions
The main sections of the Customs Act 1901 that are relevant to this legislation include section 269F, which allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). Section 269C stipulates the core criteria that must be met for a TCO application to be considered valid, specifically that no substitutable goods were produced in Australia at the time the application was lodged. Section 269P(3) mandates that if the CEO is satisfied that the application meets these criteria, they must issue a written TCO. This particular legislation, Tariff Concession Instrument No. 0604834, was issued on 19 May 2006, applying to certain airlift blowers and declaring them as goods subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, down from the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO must ensure that the TCO application is valid and meets the core criteria outlined in section 269C. Once a valid application is received, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections or concerns about the application. In this case, no objections were received. Furthermore, section 269S(1) indicates that the TCO comes into effect on the date the application was lodged, which in this instance was 6 March 2006. The TCO does not adversely affect any rights of persons (other than the Commonwealth) or impose any liabilities on them concerning actions taken prior to the registration date.
The legislation also includes provisions for penalties and consequences in the event of non-compliance. Although specific offences and penalties are not detailed in the explanatory statement, breaches of the Customs Act 1901 generally can lead to both civil and criminal penalties. Civil penalties may include fines and the recovery of unpaid duty, while criminal penalties could involve imprisonment and fines depending on the severity of the breach. It is important for all parties to adhere to the requirements set out in the Act to avoid these potential consequences.