EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606144
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.
Actron Engineering Pty Ltd applied for a TCO in respect of certain flexible vibration absorbing flowlines on 10 April 2006.
Instrument
TCO No 0606144 was made on 7 July 2006. It declares that those certain flexible vibration absorbing flowlines 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 free.
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. 0606144 is taken to have come into force on 10 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 provide for the regulation of customs and excise, including the imposition of duties and taxes on imported goods. The Act, as amended over the years, aims to facilitate trade while protecting the revenue of the Commonwealth. In 2006, a Tariff Concession Instrument (TCO) was introduced to address specific issues related to tariff concessions for certain goods. The Tariff Concession Instrument No. 0606144 was made by the Chief Executive Officer of Customs under section 269F of the Customs Act 1901, following an application by Actron Engineering Pty Ltd for a TCO concerning certain flexible vibration absorbing flowlines. The purpose of this instrument is to grant a tariff concession on these goods, providing a lower rate of customs duty as they are not substitutable by goods produced in Australia. This concession aims to support the import of these specific goods while ensuring no existing rights or liabilities are adversely affected.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes the framework for Tariff Concession Orders (TCOs) which are implemented to lower the rate of customs duty on certain goods. These TCOs are issued by the Chief Executive Officer of Customs, who assesses applications from individuals or entities seeking a lower customs duty rate on goods that meet the specified criteria. The Act applies to any person or entity that wishes to apply for a TCO for goods that are not explicitly excluded under section 269SJ. To qualify for a TCO, the goods in question must not have substitutable products produced in Australia in the ordinary course of business on the day the application was lodged, as outlined in sections 269C, 269D, 269E and 269F of the Act. The geographic reach of this legislation is national, with the application of TCOs being subject to federal customs regulations. The application process includes a requirement for the CEO to publish a notice in the Gazette, inviting any interested parties to submit their views on whether a TCO should be granted. Any exclusions or exemptions from the application of TCOs are limited to those goods specified in section 269SJ of the Act. This legislation does not disadvantage any person by affecting their rights as they stood on the date of registration, nor does it impose new liabilities on any individual or entity.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the framework for Tariff Concession Orders (TCOs), which are issued by the Chief Executive Officer (CEO) of Customs. Section 269F permits a person to apply for a TCO in respect of goods, provided that these goods are not specified in section 269SJ, which lists those ineligible for such concessions. If an application for a TCO is made, the CEO must determine if it meets the core criteria set out in section 269C. This involves ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The definitions of key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are found in sections 269D, 269E, and 269P respectively.
The obligations imposed by the Act require the CEO to carefully consider each TCO application to ensure compliance with the core criteria. If the CEO is satisfied that the application meets these criteria, they are mandated to issue a written order, which is the TCO itself. This order specifies that the goods in question are subject to a prescribed tariff item, as outlined in Schedule 4 of the Customs Tariff Act 1995. In the case of Actron Engineering Pty Ltd's application for a TCO concerning certain flexible vibration absorbing flowlines, the CEO determined that no substitutable goods were produced in Australia and thus issued a TCO on 7 July 2006. This TCO specifies that these flowlines are subject to item 50 of the Tariff, with a duty rate of free, down from the general rate of 5%.
The Act also includes provisions for public consultation. Under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested party to submit reasons why the TCO should not be made. In the case of TCO No. 0606144, no submissions were received in response to this invitation. The commencement of a TCO is governed by subsection 269S(1), which states that a TCO is deemed to come into force on the day the application was lodged. Consequently, TCO No. 0606144 is considered to have come into force on 10 April 2006. Importantly, the TCO does not affect the rights of any person other than the Commonwealth in a way that would disadvantage them or impose liabilities for actions taken prior to the registration of the TCO. Importers of these goods can benefit from this TCO by applying for a refund of duty on goods imported since the effective date of the TCO.
The Customs Act 1901 also addresses the potential for non-compliance and the resulting consequences. While the Act does not specify criminal offences directly related to the TCO process, any breach of the Act’s provisions could potentially lead to civil or administrative penalties. The precise nature and extent of these penalties would depend on the specific breach and could include fines or other financial penalties as determined by the relevant authorities. It is crucial for parties involved in the import and export of goods to comply with the requirements set out in the Act to avoid any adverse consequences.