EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605754
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.
Exide Australia Pty Ltd applied for a TCO in respect of certain setters and cappers on 28 March 2006.
Instrument
TCO No 0605754 was made on 23 June 2006. It declares that those certain setters and cappers 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. 0605754 is taken to have come into force on 28 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 Tariff Concession Instrument No. 0605754 was enacted in 2006 under the Customs Act 1901 to address the specific needs of businesses seeking tariff concessions on certain imported goods. This instrument was introduced to facilitate the application process for Tariff Concession Orders (TCOs) as outlined in Part XVA of the Act, allowing the Chief Executive Officer of Customs to reduce or eliminate customs duty on specified goods. The objective of this legislation is to ensure that when no substitutable goods are produced in Australia, businesses can benefit from reduced tariffs, thus promoting fair competition and economic efficiency. The instrument was published in the Gazette, inviting public submissions, though none were received. The TCO came into effect on 28 March 2006, the date the application was lodged, and it does not disadvantage any person by imposing liabilities for actions taken prior to its registration. Importers, in particular, benefit from this concession as they can apply for duty refunds on goods imported since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0605754, made under the Customs Act 1901, applies to goods for which an applicant, such as Exide Australia Pty Ltd, seeks a Tariff Concession Order (TCO). The Act allows the Chief Executive Officer of Customs to grant TCOs that lower the rate of customs duty on specified goods, provided the application meets the core criteria outlined in section 269C of the Act. This process involves ensuring that no substitutable goods are produced in Australia on the day the application was lodged, as defined by sections 269B and 269D of the Act. The TCO, once made, applies to the goods specified in the order and is effective from the date the application was lodged, thereby potentially benefiting importers by allowing them to claim refunds on duties paid on those goods from that date. The legislation does not impose any liabilities on persons other than the Commonwealth and protects the rights of existing parties as of the registration date of the TCO. The scope of the Act is federal, applying across Australia, and it extends to all goods subject to the Customs Act 1901, with exclusions as specified in section 269SJ of the Act.
Key Provisions
The main operative sections of this legislation, specifically under the Customs Act 1901, concern the process and criteria for making Tariff Concession Orders (TCOs) (ss 269F, 269C, 269B, 269P(3)). A TCO can be applied for by a person in respect of goods, and if the application meets the core criteria, the CEO is required to make a written order. In this case, Tariff Concession Order No. 0605754 applies to certain setters and cappers, reducing the duty rate from 5% to 0%. This instrument was made on 23 June 2006, and it came into force on 28 March 2006, the date the application was lodged.
The Act imposes several obligations on the parties involved. Firstly, any person wishing to apply for a TCO must ensure their application meets the core criteria, which requires that no substitutable goods are produced in Australia in the ordinary course of business on the date the application was lodged (s 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may object to the TCO (s 269K(1)). The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on any person in respect of anything done or omitted before the date of registration (s 269S(1)). In this instance, the CEO did not receive any submissions opposing the TCO.
Under the Customs Act 1901, failure to comply with the provisions of a TCO or any related obligations could result in civil or criminal consequences. However, the explanatory statement does not detail specific offences or penalties related to breaches of the TCO. Typically, breaches of customs regulations can lead to fines, imprisonment, or both, depending on the severity and intent of the breach. The exact penalties would be determined based on the specific provisions of the Customs Act 1901 and any applicable regulations.
In summary, the key provisions of this legislation revolve around the application, criteria, and effects of Tariff Concession Order No. 0605754. The CEO is mandated to make a TCO if certain criteria are met, and the TCO reduces the duty rate for specific setters and cappers. The Act outlines the obligations of applicants and the CEO, ensuring that the process is transparent and fair. While specific penalties for breaches are not detailed in the explanatory statement, non-compliance with customs regulations generally carries significant civil and criminal consequences.