EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608285
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.
Andritz Pty Ltd applied for a TCO in respect of certain hydraulic screw press parts on 12 May 2006.
Instrument
TCO No 0608285 was made on 28 July 2006. It declares that those certain hydraulic screw press 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 0%.
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. 0608285 is taken to have come into force on 12 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. 0608285 was enacted in 2006 under the Customs Act 1901 to address the need for a streamlined process in applying for tariff concessions on specific goods. The Customs Act 1901 establishes a framework whereby the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) that apply reduced rates of customs duty on certain goods, provided they meet the core criteria set out in the Act. This instrument was introduced to facilitate easier access to tariff concessions for businesses by reducing the duty on specific hydraulic screw press parts from 5% to 0%. The instrument was made in response to an application by Andritz Pty Ltd, and after consultation, no objections were received. The tariff concession came into effect on the date the application was lodged, 12 May 2006, and it ensures that importers can apply for a refund of duty on goods imported since that date. The policy objective is to provide tariff relief to businesses, enhancing their competitiveness without imposing additional liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0608285 under the Customs Act 1901 applies to individuals or entities seeking a tariff concession order (TCO) for specific goods. The application process is initiated when a person applies to the Chief Executive Officer (CEO) of Customs, who assesses whether the application meets the core criteria stipulated in the Act. Specifically, the CEO must determine if no substitutable goods were produced in Australia on the date the application was lodged, which is critical to qualifying for the tariff concession. The instrument came into effect on 12 May 2006, the date the application was lodged, and it specifically concerns certain hydraulic screw press parts, which are now subject to a zero rate of duty instead of the general 5% rate. The instrument does not impose any liabilities on persons other than the Commonwealth and does not affect any pre-existing rights or obligations of individuals or entities, ensuring that it only benefits importers of the specified goods by potentially allowing them to apply for a refund of duty paid on imports since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0608285 (Tariff Concession Order, or TCO) under the Customs Act 1901 (section 269F) require the Chief Executive Officer (CEO) of Customs to decide whether an application for a tariff concession meets the core criteria. If the CEO is satisfied that the application meets these criteria, as defined in section 269C, they must make a written order, a TCO, declaring that the goods specified in the application are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. In this particular case, the TCO, No. 0608285, was made on 28 July 2006, declaring that certain hydraulic screw press parts are goods to which item 50 of Schedule 4 to the Tariff applies, as no substitutable goods were produced in Australia. This means that the general rate of duty on these goods, which is 5%, is reduced to 0% for the goods subject to the TCO.
The Act imposes certain obligations on the parties it governs. Firstly, any person may apply to the CEO for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which sets out those goods that cannot be subject to a TCO (section 269F). Once an application is accepted as valid, the CEO must publish a notice in the Gazette, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). If the CEO is satisfied that the application meets the core criteria, they must make a written TCO (section 269C). 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 (subsection 269S(1)).
Under the Act, there are no specific offences, penalties, or civil/criminal consequences for breach stated within the text. However, the consequences of breaching the terms of a TCO would likely be subject to the general provisions of the Customs Act 1901, which could include fines and imprisonment for serious breaches. For example, under section 231 of the Customs Act, a person who commits an offence against the Act is liable to a penalty of up to $22,200 for an individual and up to $111,000 for a body corporate, as well as potential imprisonment for up to two years. The maximum penalties would depend on the specific nature and severity of the breach.