EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607590
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.
Pilkington (Australia) Pty Ltd applied for a TCO in respect of certain glass frame transporters straddle carriers on 01 May 2006.
Instrument
TCO No 0607590 was made on 14 July 2006. It declares that those certain glass frame transporters straddle carriers 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. 0607590 is taken to have come into force on 01 May 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. 0607590, enacted in 2006 under the Customs Act 1901, addresses the need for a streamlined process to grant tariff concessions for specific goods, in this case certain glass frame transporters straddle carriers. The Customs Act 1901 provides a framework whereby the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) that lower the customs duty on specified goods, provided certain criteria are met. This legislative instrument was introduced to ensure that importers of such goods are not unduly burdened by tariffs when no suitable Australian-produced alternatives exist. The enacting body, the Commonwealth Parliament, intended the policy objective of this legislation to be facilitating trade by reducing the cost of importing necessary goods through tariff concessions. This measure was designed to encourage economic efficiency by allowing the importation of goods at a reduced duty rate where local production does not meet demand or is not feasible.
Scope and Application
The Tariff Concession Instrument No. 0607590 under the Customs Act 1901 applies to the specific goods, namely certain glass frame transporters straddle carriers, that are the subject of the application made by Pilkington (Australia) Pty Ltd on 1 May 2006. The Act mandates that the Chief Executive Officer of Customs (the CEO) must make a written order, known as a Tariff Concession Order (TCO), if satisfied that the application meets the core criteria, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO's decision is governed by sections 269C, 269D, and 269E of the Act, which define key terms such as 'substitutable goods', 'goods produced in Australia', and 'ordinary course of business'. This instrument does not affect the rights of any person, other than the Commonwealth, as at the date of registration and does not impose any liabilities on any person. The TCO applies nationally and is effective from the date the application was lodged, which is 1 May 2006. The scope of the legislation is limited to the goods specified in the TCO and does not extend to any other goods unless specifically included in a subsequent TCO.
Key Provisions
The primary sections of Tariff Concession Order No. 0607590 under the Customs Act 1901 (section 269C) establish the criteria for the Chief Executive Officer of Customs (the CEO) to consider when making a Tariff Concession Order (TCO). This legislation mandates that a TCO will be granted if the CEO determines that no substitutable goods are being produced in Australia in the ordinary course of business on the day the application is lodged (section 269C). These definitions are further elaborated in sections 269D, 269E and 269F, which provide clarification on terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Should the CEO find that the application meets these criteria, they must issue a written order, effectively declaring the goods to which the TCO applies (section 269P(3)).
The obligations imposed by this Act on parties involve the submission of applications by interested parties, such as Pilkington (Australia) Pty Ltd, which applied for a TCO for certain glass frame transporters straddle carriers on 1 May 2006. The CEO, in turn, has the responsibility to assess these applications against the established criteria, ensuring no substitutable goods are produced domestically. If the CEO is satisfied that the application meets the criteria, they must publish a notice in the Gazette inviting submissions from any interested parties and consider these submissions before making a final decision (subsection 269K(1)). In this instance, no submissions were received.
Should any party violate the provisions of the Customs Act 1901, there are potential civil or criminal consequences. The specific offences, penalties, or consequences are not detailed within the explanatory statement; however, breaches of customs regulations typically result in penalties that can include fines and, in more severe cases, imprisonment. The maximum penalties for such breaches can vary significantly depending on the nature and severity of the offence, but they are outlined in relevant sections of the Act and associated regulations.
The commencement of Tariff Concession Order No. 0607590 is specified under subsection 269S(1) of the Customs Act 1901, which states that a TCO is deemed to have come into force on the day the application is lodged. In this case, the TCO is considered effective from 1 May 2006. Importantly, the TCO does not retroactively affect the rights of any person other than the Commonwealth, nor does it impose any liabilities on any person for actions taken before the TCO's effective date. Importers, however, benefit from this order as they can apply for a refund of duty on goods imported since the TCO's effective date, under paragraph 126(1)(r) of the Regulations.