EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606119
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.
Wintex Pty Ltd applied for a TCO in respect of certain wet comminution mills parts on 31 March 2006.
Instrument
TCO No 0606119 was made on 23 June 2006. It declares that those certain wet comminution mills parts 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. 0606119 is taken to have come into force on 31 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 Parliament of Australia, provides a framework for the administration of customs and excise duties. It includes provisions for Tariff Concession Orders (TCOs), which can be applied for to reduce the customs duty on certain imported goods. Enacted to streamline the process of applying for tariff concessions and to provide clarity around the conditions under which such concessions may be granted, this legislation aims to support Australian businesses by reducing the cost of imported goods that have no locally produced alternatives. The Tariff Concession Instrument No. 0606119, issued on 23 June 2006, is an example of how this legislative framework is applied to specific goods, such as certain wet comminution mills parts, thereby reducing their customs duty rate from 5% to 0%. The process involves an application to the Chief Executive Officer of Customs, who must determine if the application meets the core criteria, including the absence of substitutable goods produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 0606119 under the Customs Act 1901 applies to specific goods, in this case certain wet comminution mills parts, for which an application has been made for tariff concessions. The legislation is designed to lower the rate of customs duty on goods that are not substitutable by goods produced in Australia, provided the application meets the core criteria set out in the Act. The application process involves the Chief Executive Officer of Customs determining whether the goods in question are not substitutable by Australian-produced goods and then issuing a Tariff Concession Order (TCO) if the criteria are met. The TCO in question was made on 23 June 2006, declaring that the specified parts are subject to a 0% duty rate, down from the general rate of 5%. This instrument has a jurisdictional reach across the Commonwealth of Australia and affects the rights of importers by enabling them to apply for a refund of duties paid on imports since the effective date of the TCO, which is 31 March 2006. The legislation does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on individuals or entities.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0606119 under the Customs Act 1901 (section 269P(3)) provide that the Chief Executive Officer of Customs (CEO) must make a written order declaring certain wet comminution mills parts as goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, given that no substitutable goods are produced in Australia. This specific instrument (section 269S(1)) came into force on the date the application was lodged, 31 March 2006. The lower rate of customs duty for these goods is set at 0%, as opposed to the general rate of 5% for similar goods not covered by a Tariff Concession Order (TCO).
The Act imposes several obligations on the parties involved. For example, an applicant such as Wintex Pty Ltd must submit a valid application under section 269F, ensuring that the goods in question are not specified in section 269SJ, which excludes certain goods from TCO eligibility. The CEO, upon receiving a valid application, must then determine if it meets the core criteria outlined in section 269C, specifically that no substitutable goods are produced in Australia at the time of application. The CEO is also mandated under section 269K(1) to publish a notice in the Gazette inviting any interested parties to lodge submissions opposing the TCO if they believe it should not proceed. In this case, no submissions were received.
In terms of consequences for breach, the Act does not explicitly detail offences or penalties for non-compliance with the TCO process itself. However, any failure to adhere to the terms of the TCO once it is in effect could potentially lead to legal ramifications, such as penalties for incorrect declarations or fraud related to the customs duties. The specific penalties for such actions would be governed by other sections of the Customs Act 1901 and associated regulations, which may include fines or imprisonment depending on the severity of the breach. The TCO itself ensures that the rights of importers are beneficially affected and does not impose any liabilities on persons other than the Commonwealth.