EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606866
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.
Avon Products Pty Ltd applied for a TCO in respect of certain vertical lift conveyors on 11 April 2006.
Instrument
TCO No 0606866 was made on 30 June 2006. It declares that those certain vertical lift conveyors 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. 0606866 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the imposition of customs duties and the management of the import and export of goods. To address the gap in tariff concessions for specific goods not produced in Australia, the Act was amended to include provisions for Tariff Concession Orders (TCOs). This legislative change allows the Chief Executive Officer of Customs to grant lower rates of customs duty on certain goods, provided no substitutable goods are produced in Australia in the ordinary course of business. The policy objective behind these concessions is to encourage the importation of goods that are not domestically produced, thereby potentially benefiting consumers and industries reliant on these imports. The Tariff Concession Instrument No. 0606866, issued under this Act, exemplifies the process by which specific goods, such as certain vertical lift conveyors, can receive duty-free treatment, thus facilitating their importation and use in Australia.
Scope and Application
The Tariff Concession Instrument No. 0606866 under the Customs Act 1901 applies to goods, specifically vertical lift conveyors in this instance, and is directed at facilitating the import of these goods by providing a lower rate of customs duty. The Act operates at the Commonwealth level and applies to any person or entity seeking a tariff concession order for goods that are not being produced in Australia and do not have substitutable goods manufactured domestically. The scope of the Act extends to any application for a tariff concession order submitted to the Chief Executive Officer of Customs, who must then determine if the application meets the specified core criteria. These criteria include ensuring that no substitutable goods are produced in Australia in the ordinary course of business. If the application is approved, a Tariff Concession Order is issued, providing the specified goods with a reduced rate of customs duty. This particular Instrument, effective from 11 April 2006, provides a free rate of duty on the specified vertical lift conveyors, which would otherwise attract a 5% duty rate. The Act does not impose any liabilities on persons other than the Commonwealth and does not affect any existing rights as at the date of the order's registration.
Key Provisions
The primary sections of this legislation (sections 269C, 269F, and 269P) establish the framework for Tariff Concession Orders (TCO) under the Customs Act 1901. Specifically, section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for TCOs, while section 269C outlines the core criteria that must be satisfied for such an application to be considered. If these criteria are met, the CEO is required under section 269P to issue a written order that specifies the goods subject to the concession and the applicable tariff item from the Customs Tariff Act 1995.
The obligations imposed by the Act on the CEO are primarily procedural. Under section 269F, the CEO must accept valid applications for TCOs and evaluate them against the core criteria specified in section 269C. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the proposed TCO. The CEO's obligations ensure a transparent and inclusive process for determining tariff concessions.
Failure to comply with the requirements of the Customs Act 1901 and its associated regulations can result in various legal consequences. The specific penalties for breaches are not detailed in the provided explanatory statement, but generally, breaches of the Customs Act can lead to both civil and criminal penalties. Civil penalties may include fines and other monetary penalties, while criminal penalties could involve imprisonment, depending on the severity and intent of the breach. The exact penalties would be determined in accordance with the relevant sections of the Customs Act and any applicable regulations.