EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0609748
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.
Economos Australia Pty Ltd applied for a TCO in respect of certain rubber tubes on 7 June 2006.
Instrument
TCO No 0609748 was made on 25 August 2006. It declares that those certain rubber tubes 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. 0609748 is taken to have come into force on 7 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 Tariff Concession Instrument No. 0609748, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on certain goods that are not produced domestically in Australia. This instrument was developed to facilitate economic efficiency and competitiveness by providing lower rates of customs duty on specified goods. The instrument was created in response to an application by Economos Australia Pty Ltd for a tariff concession on certain rubber tubes. The Customs Act 1901 allows for Tariff Concession Orders to be made by the Chief Executive Officer of Customs, provided that the application meets the core criteria outlined in the Act. The objective is to ensure that these concessions do not disadvantage existing domestic production or impose liabilities on individuals or entities. The Tariff Concession Instrument No. 0609748 was registered on 25 August 2006 and came into force on 7 June 2006, the date the application was lodged.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that provide a lower rate of customs duty on certain goods. This legislative provision applies to any person who meets the core criteria outlined in section 269C of the Act, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269SJ of the Act excludes certain goods from being subject to a TCO. The application process involves submitting an application to the CEO, and if the application meets the criteria, a TCO is issued, as seen in the case of Economos Australia Pty Ltd’s application for certain rubber tubes. The TCO is effective from the date the application was lodged, as stipulated by section 269S(1) of the Act, and does not retroactively affect the rights of any person or impose new liabilities on anyone. The CEO is also required by section 269K(1) of the Act to invite submissions from any interested parties after accepting a valid application, although in this instance, no submissions were received. The application and issuance of a TCO are thus subject to clear statutory criteria and processes, ensuring transparency and fairness in the application of tariff concessions.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0609748 under the Customs Act 1901 include section 269F, which allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) for certain goods (s 269F). If the CEO determines that the application is not for goods listed in section 269SJ, which are ineligible for TCOs, the CEO must assess whether the application meets the core criteria outlined in section 269C. If the CEO is satisfied that the core criteria are met, they must make a written TCO under section 269P(3). In this instance, the TCO, numbered 0609748, was made on 25 August 2006, declaring that the specified rubber tubes are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, thereby applying a duty rate of 0% instead of the general rate of 5% (s 269P(3)).
The Customs Act 1901 imposes several obligations and requirements on the parties involved. The CEO must, upon receiving a valid TCO application, publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made (s 269K(1)). Although the CEO did not receive any submissions for this TCO, this requirement ensures transparency and allows for public input. Furthermore, section 269S(1) specifies that a TCO is effective from the date the application is lodged. This means that the TCO No. 0609748 is considered to have come into force on 7 June 2006, the date the application was made. Additionally, the Act ensures that the TCO does not affect the rights of any person other than the Commonwealth, nor does it impose any liabilities on such persons in relation to actions taken before the TCO's effective date (s 269S(1)).
Under the Act, there are specific consequences and penalties for breaches. However, the primary focus of the Tariff Concession Instrument No. 0609748 is to facilitate tariff concessions rather than enforce penalties. Still, if any party fails to comply with the Act's provisions or misuses the tariff concessions, they could face legal action. The exact penalties would depend on the nature and severity of the breach but could include fines, legal costs, and potential criminal charges in cases of deliberate or egregious violations. While the specific maximum penalties are not detailed in the explanatory statement, they are likely to be in line with other related provisions of the Customs Act 1901.