EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0609655
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.
Geofabrics Australasia Pty Ltd applied for a TCO in respect of certain geogrids on 2 June 2006.
Instrument
TCO No 0609655 was made on 25 August 2006. It declares that those certain geogrids 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. 0609655 is taken to have come into force on 2 June 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 by the Parliament of Australia to establish a framework for the regulation of customs and excise within the country, including the administration of customs duties and the control of the import and export of goods. The Act was introduced to address the need for a comprehensive legislative structure to manage the country's trade and commerce, ensuring compliance with international trade agreements and domestic economic policies. Part XVA of the Customs Act 1901 provides the mechanism for Tariff Concession Orders (TCOs), which allow for the reduction or elimination of customs duty on specific goods under certain conditions. This legislative framework was designed to support Australian industries by reducing costs associated with importing goods that have no domestic equivalent, thereby encouraging economic growth and competitiveness. The explanatory statement for Tariff Concession Instrument No. 0609655, made under the Customs Act 1901, outlines the process by which the Chief Executive Officer of Customs evaluates and approves applications for tariff concessions, ensuring that the policy objective of providing relief to industries without domestic substitutes is met effectively.
Scope and Application
The Customs Act 1901, as amended and applied through Tariff Concession Orders (TCOs), provides a framework for the Chief Executive Officer of Customs to grant tariff concessions on certain imported goods. These concessions are available to applicants who demonstrate that no substitutable goods are produced in Australia and that the imported goods meet specified criteria. The Act applies to individuals and entities seeking to import goods eligible for tariff concessions, specifically those who can show that their imported goods are not produced domestically and are not substitutable by local products. The scope of the Act encompasses the entire Commonwealth of Australia, as it is a federal statute. However, the application and enforcement of the TCOs are subject to the Customs Tariff Act 1995, which dictates the specific tariff rates for the goods in question. The Act excludes certain goods from being subject to TCOs, as outlined in section 269SJ, and any application for such excluded goods would not be considered. Additionally, the Act does not impose liabilities on persons other than the Commonwealth, ensuring that the rights of importers are protected and can potentially benefit from duty refunds for goods imported since the effective date of the TCO.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269P(3), and 269SJ of the Customs Act 1901. Section 269C defines the core criteria that must be met for a Tariff Concession Order (TCO) application to be considered valid, focusing on the absence of substitutable goods produced in Australia in the ordinary course of business. Section 269P(3) requires the Chief Executive Officer (CEO) of Customs to make a written TCO if the application meets these core criteria. Section 269SJ outlines the goods that cannot be subject to a TCO. The TCO itself, in this instance, TCO No. 0609655, declares that the specific geogrids in question are subject to a reduced customs duty rate, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Customs Act 1901 imposes several obligations and requirements on the parties it governs. Firstly, any person wishing to apply for a TCO must submit an application to the CEO, as per section 269F. The CEO must then determine if the application meets the core criteria outlined in section 269C. This involves assessing whether substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. If the CEO is satisfied that the application meets these criteria, they are mandated to make a TCO, as stipulated in section 269P(3). Additionally, the CEO must publish a notice in the Gazette, inviting any interested parties to lodge submissions against the TCO, in accordance with subsection 269K(1).
The legislation also outlines consequences for non-compliance. While the explanatory statement does not detail specific offences, the Customs Act 1901 generally includes provisions for penalties and sanctions for breaches of its requirements. These might include fines or imprisonment, depending on the severity and nature of the breach. For instance, knowingly providing false information in an application for a TCO could potentially lead to criminal charges. The exact penalties are not specified in the explanatory statement, but they would typically be outlined in related legislation or regulations.
The Tariff Concession Order No. 0609655 has been designed to come into force on the date the application was lodged, which is 2 June 2006, as per subsection 269S(1) of the Customs Act 1901. Importantly, this TCO does not affect any pre-existing rights of individuals or entities, ensuring that no one is disadvantaged by its implementation. Importers, however, stand to benefit from this TCO as they can apply for a refund of duty on goods imported since the effective date of the TCO, under paragraph 126(1)(r) of the Regulations. No new liabilities are imposed on any person by this TCO, maintaining fairness and legality in its application.