EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610666
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.
Securency Pty Ltd applied for a TCO in respect of certain regenerative thermal oxidisers on 22 June 2006.
Instrument
TCO No 0610666 was made on 15 September 2006. It declares that those certain regenerative thermal oxidisers 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. 0610666 is taken to have come into force on 22 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, enacted by the Australian Parliament, provides a framework for the administration of customs duties, including provisions for Tariff Concession Orders (TCOs) to facilitate trade by reducing customs duty on certain goods. Specifically, the Act allows for the Chief Executive Officer of Customs to issue TCOs under certain conditions, such as when no substitutable goods are produced in Australia. The explanatory statement for Tariff Concession Instrument No. 0610666 clarifies that the instrument was created to provide a concession on customs duty for certain regenerative thermal oxidisers, where it was determined that no substitutable goods were produced in Australia. This concession aims to benefit importers by allowing them to apply for a refund of duty on these goods imported since the effective date of the TCO, without imposing any additional liabilities or disadvantaging any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0610666 under the Customs Act 1901 applies to goods specified in the Instrument, specifically certain regenerative thermal oxidisers, which have been granted a tariff concession order (TCO) by the Chief Executive Officer of Customs (CEO). This concession reduces the customs duty on these goods from the general rate of 5% to free. The application of the TCO is contingent upon the CEO's determination that no substitutable goods are produced in Australia in the ordinary course of business. The geographic scope of this Act is national, given that it is a Commonwealth Act, and it applies to all entities importing the specified goods into Australia. There are no exclusions specified within the Instrument itself, but section 269SJ of the Act lists goods that cannot be subject to a TCO. The Act may extend its application through subordinate instruments, although specific details are not provided in the explanatory statement. The commencement date of the TCO is the day on which the application was lodged, 22 June 2006, and it does not affect the rights of any person other than the Commonwealth, ensuring that no existing liabilities or disadvantages are imposed on any party.
Key Provisions
The Tariff Concession Order (TCO) No. 0610666 under the Customs Act 1901 applies to certain regenerative thermal oxidisers and provides a tariff concession whereby the general customs duty of 5% is reduced to free (sections 269C, 269P(3)). The core criteria for a TCO, as per section 269C, require that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The TCO was issued by the Chief Executive Officer of Customs (CEO) following an application by Securency Pty Ltd on 22 June 2006, and it came into force on the same date (section 269S(1)). The CEO was satisfied that the application met the core criteria, as no substitutable goods were being produced in Australia.
The Act imposes several obligations on parties applying for a TCO. Firstly, applicants must ensure that the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. Secondly, the CEO must publish a notice in the Gazette, inviting submissions from any person who considers there are reasons why the TCO should not be made (subsection 269K(1)). Although the CEO did not receive any submissions in response to this invitation, the obligation to publish and invite submissions remains a statutory requirement. The CEO's decision to grant a TCO hinges on the absence of substitutable goods produced in Australia, as defined by sections 269D, 269E, and 269F of the Act.
Under the Customs Act 1901, failure to comply with the requirements for a TCO, or making false statements in an application, may lead to various legal consequences. While the explanatory statement does not detail specific offences, breaches of customs regulations generally can result in both civil and criminal penalties. Civil penalties might include fines and administrative fees, whereas criminal penalties could encompass imprisonment, fines, or both, depending on the severity of the breach and any relevant case law. The maximum penalties for customs-related offences can vary significantly, often influenced by factors such as the value of the goods involved and the intent behind the breach. It is important for applicants and other affected parties to adhere strictly to the statutory requirements to avoid these potential consequences.