EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610674
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.
Container Loading Solutions Pty Ltd applied for a TCO in respect of certain container loading platforms on 22 June 2006.
Instrument
TCO No 0610674 was made on 15 September 2006. It declares that those certain container loading platforms 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. 0610674 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 Commonwealth Parliament, establishes a framework for the application and administration of customs duties and tariffs in Australia. One of the mechanisms within this framework is the Tariff Concession Order (TCO), which allows for reduced customs duty on certain imported goods. The problem or gap that this mechanism addresses is the potential economic disadvantage faced by Australian businesses and consumers when imported goods are subject to higher tariffs, particularly when locally produced alternatives are not readily available. The Tariff Concession Instrument No. 0610674, which came into effect on 22 June 2006, was introduced to provide tariff relief for certain container loading platforms, recognising that no substitutable goods were produced in Australia at the time of the application. The policy objective underpinning this instrument is to support Australian industries by facilitating access to competitively priced imported goods, thereby fostering economic efficiency and consumer choice.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to goods that qualify for a lower rate of customs duty and are made when an applicant successfully meets the core criteria outlined in the Act. The TCO process applies to any person who meets the conditions set forth, specifically those who can demonstrate that the goods in question are not substitutable and are not produced in Australia. The application of a TCO is effective from the date it is lodged, thus providing immediate tariff benefits to the importers of the specified goods. The scope of the Act encompasses national jurisdiction, affecting all importers and the Commonwealth, while ensuring no disadvantage or new liabilities are imposed on any person other than the Commonwealth as a result of the TCO. Any exclusions are strictly based on the criteria for substitutable goods and production in Australia, as delineated in sections 269D, 269E and 269SJ of the Act. The Act allows for the extension of its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the tariff schedule items applicable to goods under a TCO.
Key Provisions
The main operative sections of the Customs Act 1901, specifically Part XVA, facilitate the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (sections 269C, 269F, 269P). Section 269F allows a person to apply to the CEO for a TCO concerning certain goods, provided the goods are not specified in section 269SJ, which lists those goods ineligible for a TCO. Section 269C stipulates that an application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269D, 269E, and 269F. If the CEO is satisfied that the application meets these criteria, they must make a written TCO declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The Customs Act imposes certain obligations and requirements on the parties it governs. A person seeking a TCO must ensure their application is not in respect of goods specified in section 269SJ and must meet the core criteria as outlined in section 269C. The CEO is obligated to evaluate each application against these criteria and decide whether to issue a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties, although in this case, no submissions were received (subsection 269K(1)). Once a TCO is issued, it comes into force on the day the application was lodged, as per subsection 269S(1).
The Act provides for specific offences, penalties, and consequences for breaches. While the explanatory statement does not explicitly mention penalties for non-compliance with the TCO provisions, it is reasonable to infer that general provisions within the Customs Act and associated regulations could apply. These may include fines or imprisonment for breaches related to customs duty evasion, misdeclarations, or other non-compliance issues. The precise penalties would depend on the nature and severity of the breach, as outlined in other relevant sections of the Customs Act and Customs Regulations 1993.
In summary, the key provisions of the Customs Act as applied to the TCO process involve the application and assessment criteria for tariff concessions, the publication and evaluation process, and the commencement of the TCO. The Act imposes obligations on applicants and the CEO, while potential consequences for non-compliance may include fines or imprisonment under broader customs regulations.