EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610949
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.
Alcan Gove Development Pty Ltd applied for a TCO in respect of certain alumina hydrate filtration filters parts on 27 June 2006.
Instrument
TCO No 0610949 was made on 22 September 2006. It declares that those certain alumina hydrate filtration filters parts 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 10%. 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. 0610949 is taken to have come into force on 27 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, establishes a framework for the regulation of customs and excise, including provisions for tariff concession orders (TCOs) under Part XVA. This framework aims to facilitate trade by providing relief from customs duties under certain conditions. TCO No. 0610949, issued on 22 September 2006, addresses the specific need to reduce the customs duty on certain alumina hydrate filtration filters parts. The Chief Executive Officer of Customs determined that these goods qualified for a tariff concession because no substitutable goods were produced in Australia, thus meeting the core criteria set out in section 269C of the Act. The primary objective was to encourage the import of these goods by applying a zero percent duty rate, rather than the general rate of 10%, thereby promoting economic efficiency and competitiveness in the relevant industry.
Scope and Application
The Tariff Concession Instrument No. 0610949, made under Part XVA of the Customs Act 1901, applies to certain alumina hydrate filtration filters parts and specifies a concession on the rate of customs duty for these goods. The Act allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs when specific criteria are met, including the absence of substitutable goods produced in Australia. This particular Instrument, TCO No. 0610949, was applied for by Alcan Gove Development Pty Ltd on 27 June 2006, and it was made on 22 September 2006. It specifies that the goods in question are subject to a 0% duty rate as opposed to the general rate of 10%, effective from the date of the application. The Act applies Commonwealth-wide, and while it extends to the creation of TCOs through subordinate instruments, it does not disadvantage any person by affecting their rights as at the date of registration, nor does it impose any liabilities on any person other than the Commonwealth. This TCO, therefore, benefits importers by allowing them to apply for a refund of duty on goods imported since the date of the TCO's effective commencement.
Key Provisions
The main operative sections of the Customs Act 1901 in the context of the Tariff Concession Order (TCO) No. 0610949 (section 269C, 269P, 269K, and 269S) set out the criteria and process for applying for and making a TCO. Section 269C outlines the core criteria that must be met for a TCO application, such as the absence of substitutable goods produced in Australia. Section 269P(3) mandates that if these criteria are met, the Chief Executive Officer (CEO) of Customs must issue a written TCO. Section 269K requires the CEO to publish a notice in the Gazette inviting submissions on the proposed TCO, and Section 269S specifies that a TCO is effective from the date the application is lodged. In this case, the TCO was issued on 22 September 2006, effective from 27 June 2006, reducing the duty on certain alumina hydrate filtration filters parts from 10% to 0%.
The Act imposes several obligations on the parties involved. The applicant, Alcan Gove Development Pty Ltd, must ensure that their application meets the core criteria specified in section 269C. The CEO of Customs has the responsibility to evaluate the application against these criteria and, if satisfied, issue a TCO as per section 269P(3). Furthermore, the CEO is required to publish a notice in the Gazette under section 269K, providing an opportunity for public submissions on the proposed TCO. The CEO did not receive any submissions in response to the published notice for TCO No. 0610949.
Any breaches of the Customs Act 1901 may lead to both civil and criminal consequences. For example, section 139 of the Act provides for a maximum penalty of 10,000 penalty units or imprisonment for five years, or both, for serious breaches. However, the Explanatory Statement does not specify any particular breaches related to TCO No. 0610949. It is also worth noting that the TCO does not impose any liabilities on any person and does not affect the rights of a person as at the date of registration, except to the beneficial effect of importers who may apply for a refund of duty under paragraph 126(1)(r) of the Regulations.