EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605760
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 fillers and levellers on 28 March 2006.
Instrument
TCO No 0605760 was made on 23 June 2006. It declares that those certain fillers and levellers 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. 0605760 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislative instrument was designed to address the need for flexibility in the imposition of customs duties, particularly to benefit industries that rely on imported goods that are not produced domestically. The introduction of TCOs allows for lower rates of customs duty on certain goods, provided that no substitutable goods are produced in Australia and the application meets specific criteria outlined in the Act. The policy objective is to support Australian industries by reducing the cost of imported goods that are essential for production but not manufactured locally, thereby encouraging economic growth and competitiveness.
Tariff Concession Instrument No. 0605760, made in 2006, is an example of this legislative intent in action, providing a concession on certain fillers and levellers, reducing the duty rate from 5% to 0%. This instrument was introduced following an application by Exide Australia Pty Ltd and came into effect on the date of application, 28 March 2006, without any submissions opposing the concession. The TCO ensures that the rights of importers are positively impacted, allowing them to apply for refunds of duties paid on imports since the effective date of the concession, while not imposing any liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0605760 applies to certain fillers and levellers as specified in the Customs Act 1901. It was issued under the authority of the Customs Act 1901, specifically Part XVA, which allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that can reduce the customs duty on specific goods. The Act applies to any person or entity seeking to import the specified goods and benefit from a reduced customs duty rate, which in this case is a concession from the general 5% rate down to 0%. The geographic reach of this legislation is Commonwealth, as it is a federal instrument, and its application is not restricted to any particular state or territory within Australia. The Act does not specify any exclusions or exemptions from the tariff concession, but it is contingent upon the core criteria being met, which includes the condition that no substitutable goods are produced in Australia on the day the application was lodged. The Act’s application may be extended or restricted through subordinate instruments, although no such amendments or exclusions are noted in the Explanatory Statement for this specific Instrument.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0605760 under the Customs Act 1901 (section 269F) involve the process for applying for a Tariff Concession Order (TCO) from the Chief Executive Officer (CEO) of Customs. If the CEO determines that the application meets the core criteria, they must make a written order (section 269P(3)) that effectively lowers the rate of customs duty on specified goods. The TCO in question pertains to certain fillers and levellers, which are now subject to a duty rate of 0% instead of the general rate of 5% (section 269P(3)).
Under this legislation, applicants must ensure their goods are not specified in section 269SJ, which lists goods ineligible for a TCO. The CEO must also be satisfied that no substitutable goods are produced in Australia in the ordinary course of business (section 269C). Substitutable goods are defined as those produced in Australia that serve the same use as the goods in question (section 269D and 269E). The CEO is mandated to publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any person who believes the TCO should not be granted.
The obligations imposed by this Act on the parties involved include the requirement for applicants to ensure their goods meet the eligibility criteria and for the CEO to process applications thoroughly, including considering any submissions received. Importers benefit from the TCO as they can apply for a refund of duty on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations). The Act also ensures that the rights of non-Commonwealth persons are not adversely affected by the TCO, nor are they imposed with new liabilities (subsection 269S(1)).
Failure to comply with the requirements set out in this Act can lead to various consequences. While specific offences are not detailed in the provided text, penalties for breaches of customs legislation generally can include fines and imprisonment. The maximum penalties are not explicitly stated in the provided sections, but they can be substantial under broader customs regulations. Additionally, any breach could potentially result in civil or criminal liability, depending on the nature and severity of the infringement.