EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606986
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 Pty Ltd applied for a TCO in respect of certain toughening furnace parts on 13 April 2006.
Instrument
TCO No 0606986 was made on 7 July 2006. It declares that those certain toughening furnace parts 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. 0606986 is taken to have come into force on 13 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. 0606986, enacted in 2006, amends the Customs Act 1901 by providing a lower rate of customs duty on certain toughening furnace parts through a Tariff Concession Order (TCO). This legislative instrument was introduced to address the problem of high customs duties on specific imported goods, which can increase costs and reduce competitiveness for Australian businesses. The Tariff Concession Orders scheme, outlined in Part XVA of the Customs Act 1901, allows the Chief Executive Officer of Customs to make TCOs if certain criteria are met, including the absence of substitutable goods produced in Australia. The policy objective of this instrument is to benefit importers by reducing the duty on specified goods, thereby providing tariff relief and potentially enhancing the economic viability of importing these items.
The instrument was enacted by the relevant federal authority under the authority granted by the Customs Act 1901. The process involved an application from G James Australia Pty Ltd for a TCO, which was subsequently assessed and approved by the CEO of Customs, leading to the publication of the instrument in the Gazette. No objections were received, and the TCO came into effect on the date of the application, 13 April 2006. This legislative action ensures that the rights of importers are protected and that no existing liabilities are imposed on individuals or entities as a result of the tariff concession.
Scope and Application
The Tariff Concession Order (TCO) No. 0606986 made under Part XVA of the Customs Act 1901 applies to specific toughening furnace parts. This legislation allows for the application of a lower rate of customs duty to goods specified in a TCO, provided the application meets the core criteria outlined in the Act. The Act applies to any person or entity that imports goods that are subject to a TCO, thereby reducing the customs duty on these goods to zero, whereas the general rate of duty for such goods is 5%. The geographic reach of the Act is national, as it is part of the Commonwealth's legislative framework. The application of the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, ensuring that no individual or entity is disadvantaged or incurs new liabilities due to the concession. The CEO is required to publish a notice in the Gazette inviting submissions if there are reasons why the TCO should not be made, though in this instance, no submissions were received. The TCO is deemed to have come into force on the date the application was lodged, in this case, 13 April 2006. The TCO does not impose any liabilities on any person and allows for the potential refund of duty on imports of the specified goods since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0606986 (referred to as TCO No. 0606986) are sections 269C, 269F, 269P, and 269S. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the application meets the core criteria set out in section 269C, the CEO must make a written order under section 269P. Section 269S specifies that the TCO is taken to have come into force on the day on which the application for the TCO was lodged.
The Act imposes specific obligations and requirements on both the applicant and the CEO. The applicant, in this case G James Australia Pty Ltd, must apply to the CEO for a TCO in respect of goods, ensuring the application is not for goods specified in section 269SJ, which are ineligible for a TCO. The CEO must then determine whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged, as outlined in section 269C. If the CEO is satisfied, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act also outlines potential consequences for non-compliance or breaches of the TCO provisions. While the Explanatory Statement does not specify explicit offences or penalties, it is clear that failure to adhere to the requirements for making a TCO application or the CEO's obligations could result in the TCO not being granted. The rights of importers are protected, and they can apply for a refund of duty on goods imported since the TCO's effective date. However, the Act ensures that the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO's registration date.
In summary, TCO No. 0606986 provides tariff concessions for certain toughening furnace parts, with a rate of duty set at free instead of the general rate of 5%. The process for applying and granting a TCO is clearly defined, ensuring that both the applicant and the CEO fulfill their respective obligations. Although specific penalties for non-compliance are not detailed, the Act ensures that the rights of importers are protected and that no adverse consequences arise for actions taken before the TCO's registration.