EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606133
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.
Knorr Bremse Aust Pty Ltd applied for a TCO in respect of certain anti skid valves on 3 April 2006.
Instrument
TCO No 0606133 was made on 23 June 2006. It declares that those certain anti skid valves 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 10%. 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. 0606133 is taken to have come into force on 3 April 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 was enacted to regulate the import and export of goods, including the imposition of customs duties. The Tariff Concession Instrument No. 0606133, introduced in 2006, addresses a gap by providing a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) for specific goods. This allows for a lower rate of customs duty on these goods, provided certain criteria are met. The CEO must ensure that no substitutable goods are produced in Australia in the ordinary course of business for the application to be valid. Knorr Bremse Aust Pty Ltd successfully applied for a TCO for certain anti-skid valves, reducing their duty rate from 10% to 0%. The CEO published a notice in the Gazette inviting submissions, but received none. The TCO came into effect on the date the application was lodged, 3 April 2006, and it does not disadvantage any person or impose new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0606133, made under Part XVA of the Customs Act 1901, applies to the concession of customs duty rates for certain goods that are the subject of a Tariff Concession Order (TCO). This legislation pertains specifically to the process whereby a person or entity can apply to the Chief Executive Officer of Customs for a reduction in the duty on specified goods, provided the goods meet certain criteria and are not substitutes for goods produced in Australia. The instrument extends its application to the goods specified in the application by Knorr Bremse Aust Pty Ltd for anti skid valves, which are now subject to a reduced duty rate of 0% as opposed to the general rate of 10%. The geographic reach of this legislation is national, applying across all states and territories of Australia. The Act does not specify any exclusions or exemptions but outlines that the application must not pertain to goods listed in section 269SJ of the Customs Act 1901, which are ineligible for TCOs. The Act also notes that the rights of any person, other than the Commonwealth, are not adversely affected by the TCO, and no liabilities are imposed on any person as a result of this order.
Key Provisions
The key operative sections of this legislation are sections 269C, 269P, and 269S of the Customs Act 1901, which outline the process for making a Tariff Concession Order (TCO) and the conditions that must be satisfied. Section 269C sets out the core criteria that must be met for a TCO application to be valid, which includes ensuring that no substitutable goods are produced in Australia on the day the application is lodged (section 269C). If these criteria are met, section 269P requires the Chief Executive Officer of Customs (CEO) to make a written TCO, specifying the applicable tariff item from the Customs Tariff Act 1995 (section 269P(3)). Section 269S outlines the effective date of the TCO, which is the same as the date the application was lodged (section 269S(1)).
Under this legislation, the CEO has specific obligations and requirements to follow when processing a TCO application. The CEO must first determine whether the application meets the core criteria as outlined in section 269C. If the application satisfies these criteria, the CEO is mandated to publish a notice in the Gazette, inviting any person who believes the TCO should not be made to submit their reasons (subsection 269K(1)). After reviewing any submissions, if none are received or if the CEO is satisfied with the application, a TCO must be made (section 269P(3)). Furthermore, the CEO must ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on such persons (section 269S(2)).
The legislation also includes provisions for offences and penalties, although the specific details are not provided in the explanatory statement. Generally, under the Customs Act 1901, breaches of customs laws can lead to both civil and criminal penalties. Civil penalties may include fines, while criminal penalties can result in imprisonment or fines, depending on the severity of the offence. The maximum penalties are determined by the specific provisions of the Customs Act and any relevant regulations.
Additionally, this legislation ensures that the rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). This provision aims to provide relief to importers by reducing or eliminating customs duties on the specified goods.
In conclusion, the Tariff Concession Instrument No. 0606133 under the Customs Act 1901 provides a framework for granting tariff concessions on certain goods, with specific obligations for the CEO, potential penalties for non-compliance, and benefits for importers. The instrument ensures that the process is transparent and fair, while also protecting the rights of all parties involved.