EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608150
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.
Ribloc Australia applied for a TCO in respect of certain single screw extrusion lines on 10 May 2006.
Instrument
TCO No 0608150 was made on 28 July 2006. It declares that those certain single screw extrusion lines 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. 0608150 is taken to have come into force on 10 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 Customs Act 1901 was enacted to provide a framework for the regulation of customs and excise duties in Australia. This legislation allows the Chief Executive Officer of Customs to grant tariff concessions through Tariff Concession Orders (TCOs), which provide for lower rates of customs duty on specified goods. The primary objective of this mechanism is to encourage the import of goods that are not produced domestically, thereby benefiting consumers and industries that rely on these imports. In 2006, TCO No. 0608150 was introduced following an application by Ribloc Australia for tariff concessions on certain single screw extrusion lines. The Australian Government, through the CEO, assessed the application and determined that the goods in question were not being produced domestically, thus meeting the core criteria outlined in the Customs Act. Consequently, the TCO was issued, setting the duty rate for these specific goods to zero, down from the general rate of 5%. This change aims to support Australian industries by making essential imported goods more affordable, without imposing any additional liabilities on importers or disadvantaging any pre-existing rights.
Scope and Application
The Tariff Concession Instrument No. 0608150, which operates under the Customs Act 1901, applies to entities and individuals involved in the importation of certain single screw extrusion lines, thereby providing them with tariff concessions. This Act specifically facilitates the process by which the Chief Executive Officer of Customs (CEO) can grant a Tariff Concession Order (TCO) to reduce the customs duty on specified goods. The scope of the Act encompasses any entity or person applying for such concessions, provided that the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from tariff concessions. The application of this legislation is national, affecting importers across Australia. The Act ensures that the CEO must consider the core criteria, primarily whether substitutable goods are produced in Australia, before granting a TCO. The TCO No. 0608150, which came into force on the date the application was lodged, declares that the specified goods are subject to a duty-free rate, benefitting the rights of importers who can apply for duty refunds on goods imported since the TCO's effective date.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0608150 (TCO) under the Customs Act 1901 (section 269C) pertain to the criteria that must be met for a Tariff Concession Order (TCO) to be granted by the Chief Executive Officer of Customs (CEO). Specifically, section 269C outlines that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This is further defined in sections 269D and 269E, which clarify what is meant by "goods produced in Australia" and "ordinary course of business" respectively. If the CEO is satisfied that these criteria are met, they must make a written order declaring that the goods in question are subject to a specified rate of duty under Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily centered on the application and assessment process for a TCO. The CEO has the responsibility to assess whether an application meets the core criteria as outlined in the Act. This includes ensuring that the goods specified in the application are not substitutable by any goods produced in Australia in the ordinary course of business. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit their views on whether the TCO should be made. In the case of TCO No. 0608150, the CEO did not receive any submissions opposing the order.
Furthermore, the Act imposes specific obligations on applicants for a TCO. They must ensure that their application meets the core criteria and provide sufficient evidence to support their claim that no substitutable goods are produced in Australia. In this instance, Ribloc Australia applied for a TCO in respect of certain single screw extrusion lines, and the CEO was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria.
Regarding consequences and penalties, the Act does not explicitly outline specific criminal or civil penalties for breaches of the TCO provisions. However, it does state that 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. This means that the rights of importers will be beneficially affected, and they can apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The Act ensures that the TCO does not impose any liabilities on any person, thereby protecting the interests of those who are compliant with the TCO provisions.