EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0611479
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.
Olex Australia Pty Ltd applied for a TCO in respect of certain aluminium alloy tubing on 4 July 2006.
Instrument
TCO No 0611479 was made on 22 September 2006. It declares that those certain aluminium alloy tubing 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. 0611479 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the administration of customs and excise duties, including the ability to grant tariff concession orders (TCOs) under Part XVA. This particular piece of legislation, F2006L03239, was introduced to address the issue of applying a concessional rate of customs duty on specific goods, in this case, certain aluminium alloy tubing, where no substitutable goods were produced in Australia. The policy objective, as stated in the explanatory statement, is to ensure that the application of tariff concessions benefits importers by reducing the duty rates on certain goods, thus potentially lowering import costs and making such goods more competitive in the market. The instrument was made on 22 September 2006, and it was determined that no substitutable goods were being produced in Australia, thereby satisfying the core criteria for the concession. This tariff concession came into effect from 4 July 2006, the date on which the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0611479 applies to certain aluminium alloy tubing as specified by Olex Australia Pty Ltd, granting these goods a tariff concession under the Customs Act 1901. This Act is a Commonwealth legislation, and the application of this TCO is applicable nationwide across Australia. The instrument applies to the specific entity that made the application, Olex Australia Pty Ltd, in relation to the specified goods. The concession is granted under section 269F of the Customs Act, which allows for applications to the Chief Executive Officer of Customs for tariff concessions when certain criteria are met, such as the absence of substitutable goods produced in Australia. The concession reduces the duty on these goods from 5% to 0%, effective from the date of the application, 4 July 2006. Notably, the TCO does not retroactively affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person. The instrument extends its application through the Customs Tariff Act 1995, which specifies the tariff schedule under which the concession is applied.
Key Provisions
The main provisions of this legislation are set out in the Customs Act 1901, specifically within Part XVA, which pertains to Tariff Concession Orders (TCOs). Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. If the application is not for goods listed in section 269SJ, which cannot be subject to a TCO, the CEO must determine whether the application meets the core criteria outlined in section 269C. If the CEO is satisfied that the application meets these criteria, a written order or TCO is issued, specifying that the goods in question are subject to a prescribed rate of customs duty as set out in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. The CEO is responsible for evaluating the TCO application against the core criteria, which requires the absence of substitutable goods being produced in Australia at the time of application, as defined in sections 269C, 269D, and 269E. Furthermore, once a valid TCO application is accepted, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may wish to contest the making of the TCO, as per subsection 269K(1). In this case, no submissions were received, allowing the TCO to proceed without opposition.
In terms of the consequences of breaches, the Customs Act 1901 does not explicitly outline specific offences or penalties for failing to comply with TCO provisions. However, general provisions within the Act and associated regulations may apply to breaches of customs laws, including potential fines, imprisonment, or other civil or criminal penalties for non-compliance or misuse of TCOs. Importers who benefit from the TCO may also be subject to compliance requirements, such as applying for duty refunds as per paragraph 126(1)(r) of the Regulations. The Act ensures that the TCO does not affect the rights of any person as at the date of registration, nor impose any liabilities on any person in respect of actions taken prior to the registration date.