EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605757
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.
Austral Wright Metals applied for a TCO in respect of certain copper tubes on 27 March 2006.
Instrument
TCO No 0605757 was made on 23 June 2006. It declares that those certain copper tubes 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. 0605757 is taken to have come into force on 27 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. 0605757, enacted under the Customs Act 1901, addresses the need for tariff concessions that can reduce the customs duty on certain imported goods. This instrument was introduced to ensure that Australian businesses can access goods that are not produced domestically at a lower cost, thereby promoting competition and economic efficiency. The Customs Act 1901, enacted by the Australian Parliament, provides a framework through which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) based on specific criteria. The policy objective behind the introduction of TCOs is to encourage the import of goods that are not produced in Australia, thus offering consumers and businesses access to a broader range of products at potentially lower prices. This legislative measure aims to support the competitive landscape and consumer choice by facilitating the import of non-domestically produced goods under specified conditions.
Scope and Application
The Tariff Concession Instrument No. 0605757, under the Customs Act 1901, applies to any individual or entity seeking tariff concessions on specific goods entering Australia. The scope of the Act extends to all goods that are subject to customs duty, with a particular focus on those goods for which a Tariff Concession Order (TCO) may be applicable. The instrument is applicable to the Commonwealth and any goods imported into Australia, allowing for reduced customs duty rates under certain conditions. The Act specifically excludes goods that are prohibited from receiving tariff concessions as outlined in section 269SJ. The application process involves the Chief Executive Officer of Customs determining whether the core criteria, such as the absence of substitutable goods produced in Australia, are met before issuing a TCO. The TCO's application is retroactive to the date of the application's lodgement, ensuring that any duties paid prior to the concession are eligible for a refund under the Customs Act 1901. This Act allows for the flexibility of application through subordinate instruments, which can further define and refine the application of tariff concessions in various contexts.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0605757, under the Customs Act 1901 (section 269F), allow for the application for a Tariff Concession Order (TCO) in respect of specific goods. If an application is made and the CEO is satisfied that it meets the core criteria (section 269C), they must issue a written order that declares the goods to which the TCO applies (section 269P(3)). The application process also requires the CEO to publish a notice in the Gazette, inviting submissions from any interested parties (subsection 269K(1)). In this case, Austral Wright Metals applied for a TCO on 27 March 2006, and the CEO issued TCO No. 0605757 on 23 June 2006, declaring certain copper tubes to be subject to a 0% duty rate.
The Customs Act 1901 imposes several obligations on the parties involved. The CEO must assess the application to ensure it meets the core criteria, particularly that no substitutable goods are produced in Australia at the time of the application (section 269C). The CEO must also publish a notice in the Gazette, allowing for public submissions (subsection 269K(1)). The applicant, in this case Austral Wright Metals, must provide sufficient evidence to satisfy the CEO that the application meets the criteria. The TCO, once issued, must be adhered to by all parties involved, ensuring the correct duty rates are applied to the specified goods.
Any breach of the Customs Act 1901 or the associated regulations can result in both civil and criminal penalties. For instance, failure to comply with the duty rates specified in a TCO could lead to fines and legal action against the offending party. The exact penalties are not specified in the explanatory statement, but typically, the seriousness of the breach determines the level of penalty imposed. It is also important to note that the TCO does not impose any new liabilities on individuals or entities, nor does it affect existing rights adversely (subsection 269S(1)). Importers, however, may benefit from the TCO by applying for a refund of duty on goods imported since the date the TCO is deemed to have come into effect (paragraph 126(1)(r) of the Regulations).