EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608690
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.
Paper Australia Pty Ltd applied for a TCO in respect of certain chemical recovery and regeneration plant on 19 May 2006.
Instrument
TCO No 0608690 was made on 4 August 2006. It declares that those certain chemical recovery and regeneration plant 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. 0608690 is taken to have come into force on 19 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, enacted by the Parliament of Australia, provides a framework for administering customs and excise. Part XVA of the Act establishes a scheme whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs, effectively reducing customs duties on specified goods. This legislative framework was introduced to address the need for tariff concessions in specific circumstances, particularly when there is no domestic production of substitutable goods. Paper Australia Pty Ltd's application for a TCO concerning certain chemical recovery and regeneration plant, accepted on 19 May 2006, exemplifies the Act's application. The policy objective underpinning these concessions is to support industries by reducing import costs, thereby enhancing competitiveness without disadvantaging existing rights or imposing new liabilities on entities other than the Commonwealth.
Scope and Application
The Customs Act 1901, through its Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity that seeks to import goods into Australia and seeks a reduction in customs duty through a TCO. The application process is triggered when an individual or corporate entity submits an application to the CEO, who then determines whether the application meets the specified criteria. Specifically, if no substitutable goods are produced in Australia on the date of the application, and the application does not pertain to goods listed in section 269SJ, which are ineligible for TCOs, the CEO is required to issue a written order that reduces the duty on the goods in question. This legislative scheme extends across the Commonwealth of Australia, impacting all jurisdictions uniformly. Notably, the TCO does not affect existing rights or impose new liabilities on individuals or entities except for the Commonwealth. The commencement date of the TCO aligns with the date of the application, ensuring that any duties accruing from that date are subject to the concession.
Key Provisions
The key operative sections of the Customs Act 1901, as applied in Tariff Concession Instrument No. 0608690, focus on the establishment of Tariff Concession Orders (TCOs) (s 269F). These sections permit the Chief Executive Officer (CEO) of Customs to reduce the rate of customs duty for specified goods if certain criteria are met. For instance, section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. This means that if goods are unique and not produced domestically, they are eligible for tariff concessions. Section 269P(3) further mandates that the CEO must issue a written TCO if satisfied that the application meets the core criteria.
Under this Act, the obligations imposed on parties and entities are primarily on the CEO of Customs. The CEO must decide whether an application for a TCO meets the core criteria (s 269C) and, if so, issue a written TCO (s 269P(3)). The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties if the application is accepted as valid (s 269K(1)). The CEO in this case did not receive any submissions in response to the notice, indicating a smooth process towards the issuance of the TCO.
Failure to comply with the provisions of the Customs Act 1901 can result in various penalties and consequences. While specific offences and penalties are not detailed in the explanatory statement, breaches of the Customs Act generally can lead to both civil and criminal penalties. These can include fines and imprisonment, depending on the severity of the breach. The maximum penalties would be dictated by the specific provisions of the Customs Act and related legislation.
Overall, the Tariff Concession Instrument No. 0608690, as outlined in the explanatory statement, provides a framework for reducing customs duty on specified goods under certain conditions. The CEO of Customs plays a crucial role in assessing applications, issuing TCOs, and ensuring compliance with the Act. The absence of submissions in response to the Gazette notice indicates that the process was transparent and free from objections, leading to the successful implementation of the tariff concession for the specified chemical recovery and regeneration plant.