EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612431
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.
Continental Carbon Australia Pty Ltd applied for a TCO in respect of certain gas filters on 25 July 2006.
Instrument
TCO No 0612431 was made on 13 October 2006. It declares that those certain gas filters 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. 0612431 is taken to have come into force on 25 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 Australian Parliament, establishes a framework for the administration of customs and excise duties. The Act aims to regulate the importation and exportation of goods and to provide for the collection of duties. Among other provisions, Part XVA of the Customs Act 1901 introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). This scheme was introduced to address the need for tariff concessions on certain goods, providing economic benefits by reducing the customs duty on specified goods, provided that no substitutable goods are produced in Australia. Tariff Concession Instrument No. 0612431, made on 13 October 2006, is an example of this scheme in action, providing a tariff concession on certain gas filters, reducing the duty rate from 5% to 0%. The instrument was introduced following an application by Continental Carbon Australia Pty Ltd and came into force on 25 July 2006, the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0612431, enacted under the Customs Act 1901, applies to specific entities or individuals who seek tariff concessions for goods imported into Australia. It targets the application of reduced customs duty rates on certain gas filters, as requested by Continental Carbon Australia Pty Ltd, provided that no substitutable goods are produced in Australia in the ordinary course of business. The instrument was made by the Chief Executive Officer of Customs, who must ensure that the application for tariff concessions meets the core criteria set out in the Customs Act, specifically that no substitutable goods were produced in Australia on the day the application was lodged. This instrument, which came into effect on 25 July 2006, applies nationally across Australia and provides a lower rate of customs duty on the specified gas filters, reducing the general rate of 5% to 0%. No submissions were received in opposition to this tariff concession, and it does not disadvantage any person or impose new liabilities beyond the date of its registration.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0612431 under the Customs Act 1901 (section 269F) relate to the application for a Tariff Concession Order (TCO) concerning certain gas filters. Upon the application by Continental Carbon Australia Pty Ltd on 25 July 2006, the Chief Executive Officer of Customs (CEO) was mandated to assess whether the application met the core criteria set out in the Act. Specifically, section 269C requires that for a TCO to be granted, there must be no goods produced in Australia in the ordinary course of business that could substitute for the goods in question. The CEO, being satisfied that no substitutable goods were produced in Australia, issued TCO No. 0612431 on 13 October 2006, declaring that the gas filters are subject to a 0% duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on parties and entities governed by it include the requirement for the CEO to assess TCO applications against the core criteria (section 269C). This involves determining whether any substitutable goods are produced in Australia, as defined in sections 269D (goods produced in Australia) and 269E (ordinary course of business). Additionally, section 269K(1) mandates the CEO to publish a notice in the Gazette, inviting submissions from interested parties if the application is deemed valid. While no submissions were received for this particular TCO, the procedure ensures transparency and opportunity for stakeholder input. The TCO itself, as per subsection 269S(1), is considered to have come into force on the date of the application, in this case, 25 July 2006.
The Act delineates the consequences for non-compliance, although specific offences and penalties are not detailed in the Explanatory Statement. Generally, breaches of the Customs Act can lead to various civil and criminal penalties, depending on the nature and severity of the breach. The maximum penalties for offences under the Customs Act can include substantial fines and imprisonment, reflecting the seriousness with which the legislation treats non-compliance. The imposition of a 0% duty rate on the gas filters under the TCO does not disadvantage any person, as per the provision under paragraph 126(1)(r) of the Regulations, which allows importers to apply for a refund of duty on goods imported since the TCO came into force. This ensures that the TCO does not impose liabilities on any person, maintaining the integrity of the legislative framework.