EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605940
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.
Longwall Hydraulics Pty Ltd applied for a TCO in respect of certain triple plunger pumps on 28 March 2006.
Instrument
TCO No 0605940 was made on 23 June 2006. It declares that those certain triple plunger pumps 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. 0605940 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, facilitates the application of tariff concessions to specific goods through Tariff Concession Orders (TCOs), aiming to reduce customs duty on these goods. This legislative framework enables businesses to apply for a lower duty rate on imported goods if no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0605940, introduced in 2006, addresses the need to provide tariff relief to importers, thereby promoting economic efficiency and competitiveness by allowing businesses to access imported goods at a reduced cost. The policy objective is to ensure that the application of tariff concessions does not disadvantage existing rights holders and does not impose new liabilities on individuals or entities, while still benefiting importers by potentially allowing refunds on duties paid before the concession was applied.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at applying a lower rate of customs duty to specific goods. This legislative framework applies to entities or individuals seeking to import goods that qualify under the criteria set out in the Act. Notably, a TCO can only be issued if the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO, and if no substitutable goods are produced in Australia at the time of the application. The instrument extends across the Commonwealth of Australia, affecting all territories and states within its jurisdiction. The TCO No. 0605940, issued on 23 June 2006, specifically applies to certain triple plunger pumps, reducing their duty rate from 5% to 0%, effective from the date the application was lodged, 28 March 2006. This TCO does not disadvantage any person other than the Commonwealth nor does it impose any new liabilities on entities or individuals, thereby only conferring benefits to importers who can claim refunds for duties paid on these goods since the effective date.
Key Provisions
The primary operative sections of the Customs Act 1901, particularly section 269C, establish the criteria that must be met for a Tariff Concession Order (TCO) to be granted. This section specifies that a TCO application is deemed to meet the core criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. Additionally, section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided those goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, they must make a written order 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 applies.
The Act imposes several obligations and requirements on parties involved in the TCO process. Firstly, section 269P(3) mandates that if the CEO is satisfied that a TCO application meets the core criteria, they must make a written order. Furthermore, section 269K(1) requires the CEO to publish a notice in the Gazette inviting any person who considers there are reasons why the TCO should not be made to lodge a submission. The CEO must also ensure that no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D, 269E, and 269F. These sections outline the specific definitions and criteria necessary for the CEO to make an informed decision on the TCO application.
Under the Customs Act 1901, there are specific offences, penalties, and consequences for breaches related to the TCO process. Section 269S(1) stipulates that a TCO is taken to have come into force on the day on which the application for the TCO was lodged. Failure to comply with the requirements of the Act or the terms of a TCO may result in civil or criminal penalties. However, the Explanatory Statement does not specify the exact nature or maximum penalties for breaches, but it is implied that non-compliance could lead to legal action. The Act ensures that the rights of importers will be beneficially affected, and the TCO does not impose any liabilities on any person other than the Commonwealth.