EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0611316
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.
Wichard Pacific applied for a TCO in respect of certain yacht fittings on 4 July 2006.
Instrument
TCO No 0611316 was made on 22 September 2006. It declares that those certain yacht fittings 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. 0611316 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. 0611316, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions for specific goods, allowing for reduced customs duties. This instrument was created to facilitate the application process for tariff concession orders, which are granted by the Chief Executive Officer of Customs when certain criteria are met. This particular instrument pertains to yacht fittings, which were subject to a tariff concession from a general rate of 5% down to 0%. The Australian Parliament enacted this legislation to streamline the process by which businesses can apply for and obtain tariff concessions on goods not produced domestically, thereby potentially reducing costs and increasing competitiveness. The policy objective is to ensure that Australian businesses can access necessary goods at a lower cost when no local substitutes are available.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply lower rates of customs duty to specified goods. This legislative framework applies to any person or entity that can demonstrate that the goods for which a TCO is sought are not substitutable by goods produced in Australia in the ordinary course of business. The application process mandates that the CEO must ensure that the goods are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The application must meet the core criteria outlined in section 269C, which essentially requires the absence of substitutable goods produced in Australia. The geographic reach of this legislation is national, as it applies across Australia under the authority of the Commonwealth. There are no stated exclusions or exemptions within the Act itself, although the CEO retains discretion in the application process. Any further application details or thresholds are determined by the CEO in accordance with the Act and any subordinate instruments, which may extend or restrict the application of the Act.
Key Provisions
The key operative sections of the Tariff Concession Order No. 0611316, which is covered by the Customs Act 1901, concern the granting of tariff concessions for specific goods. Section 269F of the Act allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the application is deemed valid and meets the core criteria outlined in sections 269C and 269P, the CEO must make a written order declaring that the goods in question are eligible for a lower rate of customs duty, as specified in the order (section 269P(3)). This particular TCO, number 0611316, pertains to certain yacht fittings and reduces the general rate of duty from 5% to 0%.
The obligations imposed by the Act on the parties and entities it governs primarily concern the application process and the conditions under which a TCO may be granted. The CEO must ensure that any TCO application is not in respect of goods that are specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. Additionally, the CEO must determine whether the application meets the core criteria, which include verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Furthermore, the CEO must publish a notice in the Gazette as soon as practicable after accepting the application, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)).
The Act also sets out the consequences for non-compliance and breaches of its provisions. While specific offences and penalties are not detailed in the explanatory statement, it is clear that failure to adhere to the conditions and requirements set forth in the Act could lead to legal ramifications. The TCO itself does not impose any liabilities on any person and does not affect the rights of persons other than the Commonwealth. However, the rights of importers will be beneficially affected, as they will be able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.
In summary, the Tariff Concession Order No. 0611316 operates under the Customs Act 1901 to provide a lower rate of customs duty for certain yacht fittings, subject to the application process and core criteria outlined in the Act. The CEO is tasked with ensuring the validity of applications and the conditions under which TCOs are granted. While specific penalties for non-compliance are not detailed, adherence to the Act's provisions is crucial to avoid potential legal consequences. The rights of importers are protected and beneficially affected by the TCO, with the potential for duty refunds on eligible goods.