EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606833
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.
Onesteel Manufacturing Pty Ltd applied for a TCO in respect of certain pressure filters on 11 April 2006.
Instrument
TCO No 0606833 was made on 7 July 2006. It declares that those certain pressure filters 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. 0606833 is taken to have come into force on 11 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. 0606833 was enacted in 2006 under the Customs Act 1901 to address the need for tariff concessions on certain imported goods that do not have Australian-made equivalents. The instrument was introduced to provide relief to businesses that rely on importing specific goods for their operations, ensuring they do not face undue financial burdens due to high customs duties. The Customs Act 1901, as amended, allows for the Chief Executive Officer of Customs to grant tariff concessions when it is determined that no substitutable goods are produced in Australia. The policy objective behind this instrument is to facilitate smoother trade and support industries that require imported goods not produced domestically. The instrument was created following an application by Onesteel Manufacturing Pty Ltd for tariff concessions on certain pressure filters, and after the CEO found that no suitable Australian alternatives existed, the concession was granted effectively from the date of the application.
Scope and Application
The Tariff Concession Instrument No. 0606833 applies to the goods specified in the instrument, namely certain pressure filters, which are subject to a Tariff Concession Order (TCO) under the Customs Act 1901. This Act applies to persons or entities seeking tariff concessions for goods that are not produced in Australia and do not have substitutable goods available domestically, as specified under sections 269C and 269SJ of the Act. The instrument pertains to the Commonwealth jurisdiction, extending the benefits of the TCO to importers of the specified goods. The application of the TCO is retrospective to the date of the initial application, 11 April 2006, as outlined in subsection 269S(1) of the Act. The TCO does not affect the rights of any person other than the Commonwealth, ensuring that no existing liabilities are imposed or disadvantaged prior to the registration date of the TCO. The instrument does not explicitly mention any exclusions or thresholds beyond the core criteria stipulated in the Customs Act 1901. The application of the TCO may be extended or restricted through subordinate instruments as necessary under the authority of the Act.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0606833 under the Customs Act 1901 (section 269P(3)) require the Chief Executive Officer of Customs (CEO) to make a written order, known as a Tariff Concession Order (TCO), when satisfied that an application meets the core criteria. This is stipulated in section 269C of the Act, which mandates that for a TCO application to be valid, it must be demonstrated that no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines key terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods". Upon meeting these criteria, the CEO must declare the specified goods to be subject to a lower rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties involved include the submission of a valid TCO application by the applicant, which in this case was Onesteel Manufacturing Pty Ltd for certain pressure filters. The CEO must then review the application against the core criteria set out in section 269C, ensuring that no substitutable goods were produced in Australia on the application date. Additionally, the CEO is required to publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not proceed (section 269K(1)). In this instance, no submissions were received.
The Act also outlines the consequences for breaches or non-compliance. However, the explanatory statement does not detail specific offences, penalties, or consequences related to TCOs. Typically, breaches of the Customs Act could lead to civil or criminal penalties, but the exact nature of these penalties would depend on the specific breach and other relevant legislation. The statement does clarify that the TCO does not affect the rights of any person as at the date of registration in a way that would disadvantage them or impose liabilities for actions taken before the TCO was registered. Importers, however, benefit from being able to apply for a refund of duty on goods imported since the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).