EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0611315
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.
Sun Metals Corporation Pty Ltd applied for a TCO in respect of certain boiler parts on 4 July 2006.
Instrument
TCO No 0611315 was made on 22 September 2006. It declares that those certain boiler 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 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. 0611315 is taken to have come into force on 4 July 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. 0611315 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific goods that are not produced domestically. This instrument, issued by the Chief Executive Officer of Customs, aims to provide relief from customs duties for certain imported goods, specifically certain boiler parts, by lowering the duty rate from the general 5% to 0%. This initiative was introduced to support the importation of goods that are not manufactured within Australia, thereby facilitating trade and potentially lowering costs for businesses importing these specific parts. The Customs Act 1901, enacted by the Australian Parliament, empowers the CEO to make such Tariff Concession Orders, ensuring that the application process aligns with the policy objective of avoiding disadvantage to domestic producers where no substitutable goods are produced locally.
Scope and Application
The Tariff Concession Instrument No. 0611315 under the Customs Act 1901 applies to goods for which a Tariff Concession Order (TCO) has been applied and approved by the Chief Executive Officer of Customs (CEO). Specifically, it concerns the application by Sun Metals Corporation Pty Ltd for a TCO related to certain boiler parts. The TCO provides a concession on customs duty for these parts, reducing the duty from 5% to 0%, provided no substitutable goods are produced in Australia. The Act applies to individuals and entities seeking tariff concessions on imported goods, aiming to encourage the importation of goods not produced domestically by offering a lower duty rate. This Act has a national jurisdictional reach, administered by the Commonwealth through the CEO of Customs. The application of the TCO does not disadvantage any person, including importers, who may benefit from a refund of duties paid on the specified goods since the effective date of the TCO. The Act does not impose any liabilities on any person other than the Commonwealth. The scope of the Act may be further extended or restricted through subordinate instruments, which are not specified in this particular explanatory statement.
Key Provisions
The primary operative sections of this Tariff Concession Order (TCO) are sections 269F, 269C, and 269P of the Customs Act 1901 (the Act). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria specified in section 269C, they must make a written order declaring the goods subject to the TCO application (section 269P(3)). This TCO No. 0611315, made on 22 September 2006, declares that certain boiler parts are subject to a 0% rate of customs duty, as opposed to the general rate of 5%.
The obligations and requirements imposed by the Act on the parties involved are centred around the application and approval process for a TCO. The applicant, in this case Sun Metals Corporation Pty Ltd, must ensure their application meets the core criteria outlined in section 269C, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). The CEO, in this instance, did not receive any submissions in response to the published notice.
The Act outlines specific consequences for breach of its provisions. While the Explanatory Statement does not detail specific offences or penalties related to TCO applications, general provisions of the Customs Act 1901 would apply. Typically, breaches of the Act could result in civil or criminal penalties, including fines and imprisonment, depending on the severity of the breach. The Act allows for the imposition of fines and penalties for non-compliance, though exact maximum penalties are not detailed in this context.
The Tariff Concession Order No. 0611315 effectively lowers the customs duty on certain boiler parts from 5% to 0%. This concession applies from the date the application was lodged, 4 July 2006, as per subsection 269S(1) of the Act. Importantly, the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, nor does it impose any liabilities on any person in respect of anything done or omitted before the date of registration. Importers of the affected goods will benefit from this order by being eligible to apply for a refund of duty on goods imported since the effective date of the TCO, as provided under paragraph 126(1)(r) of the Regulations.
Overall, this Tariff Concession Order facilitates the import of certain boiler parts by reducing the applicable customs duty rate, provided the core criteria are met. The process ensures transparency and fairness, with opportunities for public submissions before the CEO makes a decision on the TCO application. The absence of any submissions in this case indicates a smooth process and broad acceptance of the application's merits.