EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607045
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.
LCL Pty Ltd applied for a TCO in respect of certain oil removal centrifuges on 20 April 2006.
Instrument
TCO No 0607045 was made on 14 July 2006. It declares that those certain oil removal centrifuges 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. 0607045 is taken to have come into force on 20 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, establishes a framework for imposing customs duties on imported goods. This legislation includes provisions for Tariff Concession Orders (TCOs) under Part XVA, which allow for the reduction or exemption of customs duties on certain goods. The policy objective is to promote trade and industry by making imported goods more affordable, thereby supporting economic growth. The Act empowers the Chief Executive Officer of Customs to make TCOs when certain conditions are met, such as the absence of substitutable goods produced in Australia. This mechanism ensures that Australian industries are not unfairly disadvantaged by cheaper imported alternatives. The process involves applications from interested parties, consideration of submissions, and the issuance of a written order when criteria are satisfied. The Tariff Concession Instrument No. 0607045, made on 14 July 2006, is an example of this process in action, granting a tariff concession for certain oil removal centrifuges, reducing the duty rate from 5% to free.
Scope and Application
The Customs Act 1901 applies to the process of granting Tariff Concession Orders (TCOs) for specific goods, facilitating tariff concessions for those goods. This Act applies to any person or entity seeking to import goods that are eligible for a tariff concession. The application process involves the Chief Executive Officer of Customs (CEO) who evaluates whether the goods meet the core criteria for a concession, such as the absence of substitutable goods produced in Australia in the ordinary course of business. The Act's reach is national, as it operates under the authority of the Commonwealth and applies across all states and territories in Australia. However, certain goods specified in section 269SJ of the Act are excluded from being subject to a TCO. The application and implementation of TCOs can be further defined through subordinate instruments, although the primary legislation itself outlines the key criteria and process for concessions. The TCO No. 0607045, which provides a tariff concession for certain oil removal centrifuges, is a specific example of this process in action.
Key Provisions
The primary sections of the Customs Act 1901 that are relevant to the Tariff Concession Instrument No. 0607045 include section 269F, which allows for the application of a Tariff Concession Order (TCO) by a person; section 269C, which outlines the core criteria that must be satisfied for a TCO application to be approved; and section 269P, which mandates the making of a written order if the core criteria are met. Specifically, section 269F allows individuals to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of particular goods, whereas section 269C stipulates that the application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that these criteria are met, section 269P requires the CEO to make a written order declaring that the goods the subject of the TCO application are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on parties involved in the TCO process. Firstly, any person wishing to apply for a TCO must ensure that their application is made in accordance with section 269F and that it pertains to goods not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. Once an application is accepted as valid, the CEO must publish a notice in the Gazette under section 269K(1), inviting any interested parties to lodge submissions if they believe the TCO should not be made. Additionally, section 269P(3) requires the CEO to make a written TCO if the core criteria are satisfied, which involves declaring that the goods in question are subject to a specific tariff concession.
Failure to comply with the requirements of the Customs Act 1901 in relation to TCOs may result in various consequences. While the explanatory statement does not explicitly detail offences or penalties for breaches, the Act generally provides for both civil and criminal penalties for non-compliance with customs regulations. For instance, section 287 of the Act allows for fines and imprisonment for wilful or negligent breaches, with penalties varying depending on the severity of the offence. Given that TCOs are integral to the tariff concessions process, any misapplication or failure to adhere to the statutory requirements could potentially lead to enforcement actions, including fines and imprisonment.
For the specific Tariff Concession Instrument No. 0607045, the explanatory statement indicates that it came into force on 20 April 2006, the day the application was lodged, as per subsection 269S(1). This date marks the commencement of the tariff concessions for the specified oil removal centrifuges, which now enjoy a duty-free status under item 50 of Schedule 4 to the Customs Tariff Act 1995. It is also worth noting that the TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person, ensuring that the rights of importers are protected and that no new liabilities are created retroactively.