EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606749
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.
G James Australia applied for a TCO in respect of certain anodising line fume scubbers on 7 April 2006.
Instrument
TCO No 0606749 was made on 30 June 2006. It declares that those certain anodising line fume scubbers 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. 0606749 is taken to have come into force on 7 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 Tariff Concession Instrument No. 0606749, enacted under the Customs Act 1901, addresses the need for a streamlined process to grant tariff concessions on specific imported goods. This instrument was introduced to facilitate the application process for Tariff Concession Orders (TCOs) and ensure that certain goods benefit from reduced or free customs duties when no substitutable goods are produced in Australia. The instrument was created by the Chief Executive Officer of Customs, who is mandated to assess applications for TCOs and determine whether they meet the core criteria set out in the Customs Act. The policy objective is to encourage the importation of goods that are not domestically produced, thereby supporting industries that rely on imported materials and fostering competitive market conditions.
The instrument was enacted following a valid application by G James Australia for a TCO concerning specific anodising line fume scrubbers, submitted on 7 April 2006. The CEO was satisfied that no substitutable goods were produced in Australia and thus issued TCO No. 0606749 on 30 June 2006, effective from the date of the application. The general duty rate on these goods is 5%, but the TCO provides for a duty-free rate, enhancing the benefits for importers. No submissions opposing the TCO were received, and the instrument does not impose any liabilities on any person, only beneficially affecting the rights of importers.
Scope and Application
The Tariff Concession Instrument No. 0606749, issued under the Customs Act 1901, applies specifically to goods for which a Tariff Concession Order (TCO) has been made, such as certain anodising line fume scrubbers in this instance. The Act allows for the reduction or exemption of customs duty on particular goods, provided they meet the core criteria, such as the absence of substitutable goods produced in Australia. The application of this legislation is national in scope, extending across the Commonwealth of Australia, and applies to entities involved in the importation of these specified goods. The legislation explicitly excludes certain goods from being subject to a TCO as defined in section 269SJ of the Act. The CEO of Customs retains the authority to extend or restrict the application of the Act through subordinate instruments, ensuring that the administration of tariff concessions remains flexible and responsive to changing economic conditions and industry needs.
Key Provisions
The main operative sections of this legislation (Tariff Concession Instrument No. 0606749) focus on the creation and enforcement of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods, while section 269C stipulates that such an application will meet the core criteria if no substitutable goods were produced in Australia on the day the application was lodged (subsection 269P(3)). If the CEO is satisfied that the application meets these criteria, they are required to make a written TCO order (section 269P(3)), which in this case, was done on 30 June 2006, declaring that certain anodising line fume scrubbers are subject to a lower rate of customs duty, specifically item 50 of Schedule 4 to the Customs Tariff Act 1995, with the rate of duty set at free (subsection 269P(3)).
The obligations and requirements imposed by this Act on the parties and entities it governs are primarily centred around the application process for TCOs. The applicant must ensure that the goods in question are not substitutable by any goods produced in Australia on the day the application is lodged. The CEO, on their part, must promptly publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). The CEO must also consider any submissions received and decide whether the application meets the core criteria (section 269C). In this instance, G James Australia applied for the TCO, and the CEO did not receive any submissions opposing the TCO, hence the order was made on 30 June 2006.
Failure to comply with the requirements or obligations set out in this legislation may result in various consequences. While the explanatory statement does not explicitly mention offences, penalties, or consequences for breach, it is reasonable to infer that breaches of the Customs Act 1901 may result in civil or criminal penalties, as is typically the case with breaches of legislation. The specific penalties for breaches of the Customs Act 1901 can vary, but they may include fines, imprisonment, or both, depending on the nature and severity of the breach. It is important for applicants and the CEO to adhere to the provisions of the Act to avoid any potential legal consequences.