EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606244
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.
Signum Specialities Pty Ltd applied for a TCO in respect of certain pressure formers on 4 April 2006.
Instrument
TCO No 0606244 was made on 30 June 2006. It declares that those certain pressure formers 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. 0606244 is taken to have come into force on 4 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 a framework for the regulation of imports and exports, including the imposition and remission of customs duties and the administration of customs-related laws. One of the mechanisms established under the Act is the Tariff Concession Order (TCO) scheme, which allows for the reduction or elimination of customs duty on certain goods under specific circumstances. The Tariff Concession Instrument No. 0606244, introduced on 30 June 2006, is an example of this scheme in action, providing a tariff concession for certain pressure formers by reducing the customs duty from 5% to 0%. The instrument was made following an application by Signum Specialities Pty Ltd and was enacted to address the issue of ensuring that Australian businesses have access to competitively priced goods necessary for their operations, thereby supporting economic efficiency and competitiveness. This instrument was enacted by the Chief Executive Officer of Customs in accordance with the legislative authority provided by the Customs Act 1901, with the policy objective of facilitating trade by reducing the cost of imported goods that are not domestically produced.
Scope and Application
The Tariff Concession Instrument No. 0606244 applies to any entity that seeks to import goods specified in the instrument, which in this case are certain pressure formers, and benefits those importers by reducing the duty payable on these goods from the general rate of 5% to 0%. This instrument operates under the Customs Act 1901 and its provisions are intended to provide relief to importers by reducing customs duty on specific goods, provided no substitutable goods are produced in Australia in the ordinary course of business. The application of this Tariff Concession Order (TCO) is governed by the core criteria set out in section 269C of the Act, ensuring that the import of these goods does not compete with Australian production. The instrument extends across the Commonwealth of Australia, affecting all importers of the specified goods within this jurisdiction. Notably, the TCO does not impose any new liabilities on any person and does not affect any pre-existing rights or liabilities incurred prior to its effective date. The CEO of Customs is responsible for deciding whether an application meets the core criteria, and once satisfied, the CEO issues a TCO that specifies the lower duty rate applicable to the goods.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0606244 under the Customs Act 1901 are sections 269C, 269F, and 269P. Section 269F enables an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) concerning certain goods, provided they do not fall under the list of goods specified in section 269SJ which cannot be subject to a TCO. Section 269C outlines the core criteria that an application must meet; specifically, it requires that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must make a written order, a TCO, declaring that the specified goods are subject to a prescribed rate in the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved include the requirement for an applicant to ensure their application for a TCO is lodged in compliance with the criteria set out in section 269C. The CEO is obligated to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting submissions from any person who believes there are reasons why the TCO should not be made. The CEO must also decide whether to issue a TCO if the application meets the criteria under section 269P(3). The TCO itself comes into force on the date the application was lodged, as stated in subsection 269S(1).
In terms of consequences for non-compliance, the Act does not explicitly detail specific offences or penalties for breaching the terms of the TCO. However, general breaches of customs laws can lead to various civil and criminal penalties. Civil penalties may include fines and the potential for the goods to be seized and forfeited, while criminal penalties can result in imprisonment depending on the severity of the breach. The maximum penalties for breaches of customs laws can vary significantly, but they are typically outlined in the Customs Act 1901 and associated regulations, which include provisions for fines and imprisonment.