EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0611592
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.
Jennmar Australia Pty Ltd applied for a TCO in respect of certain dome ball washers on 10 July 2006.
Instrument
TCO No 0611592 was made on 22 September 2006. It declares that those certain dome ball washers 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. 0611592 is taken to have come into force on 10 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 was enacted to facilitate the administration of customs duties and the regulation of imports and exports in Australia. The Act was designed to address the need for a structured framework to govern the import and export processes, ensuring compliance and effective management of trade. The policy objective of the Act is to streamline customs procedures, protect domestic industries, and generate revenue for the government through customs duties. The Customs Act 1901 empowers the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) to provide relief on customs duties for certain goods, subject to specific criteria. This mechanism ensures that Australian consumers and businesses can access goods at reduced costs, provided no suitable alternatives are produced domestically.
Scope and Application
The Tariff Concession Instrument No. 0611592 under the Customs Act 1901 applies to the specific goods, namely certain dome ball washers, as designated by Jennmar Australia Pty Ltd in their application for a Tariff Concession Order (TCO). The Act, through its section 269C, specifies that a TCO application is eligible if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This means the legislation targets the importation of these particular goods, allowing them to benefit from a concessional rate of customs duty, specifically reducing the rate from 5% to 0%. The TCO applies to entities importing these goods and is effective from the date the application was lodged, 10 July 2006, as per the commencement provisions of the Act. The geographic scope is national, as the concessions apply across Australia, and the instrument extends the application of the Customs Act in relation to these specific goods. No exclusions or exemptions are noted in the explanatory statement, and there are no indications that the application of this TCO extends or is restricted through subordinate instruments.
Key Provisions
The main operative sections of the Customs Act 1901, particularly in relation to Tariff Concession Orders (TCOs), include sections 269C, 269F, and 269P. Section 269F allows for applications to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods, whereas Section 269C outlines the core criteria that the application must meet, including the absence of substitutable goods produced in Australia at the time the application is lodged. Once these criteria are met, Section 269P(3) mandates that the CEO must issue a written TCO, specifying the goods and the applicable customs duty rate. For instance, TCO No. 0611592 pertains to certain dome ball washers and applies a 0% duty rate instead of the general 5% rate.
The obligations imposed by the Act on the parties involved are multifaceted. For applicants like Jennmar Australia Pty Ltd, the obligation is to submit a well-supported application to the CEO, ensuring that the core criteria are met. The CEO, on the other hand, has the responsibility to evaluate the application and decide whether to grant the TCO, based on the criteria set out in the Act. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made. The Act also places an obligation on the CEO to ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose liabilities for actions taken before the TCO was issued.
There are no specific offences, penalties, or civil/criminal consequences outlined in the explanatory statement for breaches of the Tariff Concession Orders. However, the implications of not adhering to the criteria or procedural requirements set out in the Customs Act 1901 could result in the rejection of the TCO application. For the CEO, failing to follow the statutory obligations could lead to legal challenges or administrative consequences. Moreover, if a TCO is issued in error, the CEO may be required to revoke it, potentially affecting the rights of the applicant and importers who have relied on the concession.