EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612697
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.
Elgas Ltd applied for a TCO in respect of certain gas bottle covers on 31 July 2006.
Instrument
TCO No 0612697 was made on 13 October 2006. It declares that those certain gas bottle covers 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 free.
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. 0612697 is taken to have come into force on 31 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 by the Australian Parliament to provide for the administration of customs and excise duties, among other things. This Act allows for the establishment of a tariff concession scheme under which the Chief Executive Officer of Customs can grant tariff concessions on certain goods, reducing the rate of customs duty applied to those goods. This was introduced to address the need for a flexible mechanism to support Australian industry by reducing the duty on specific goods under certain conditions. Tariff Concession Instrument No. 0612697, made under the authority of the Customs Act 1901, aims to provide a tariff concession for certain gas bottle covers by setting the duty rate to free, effective from 31 July 2006. The policy objective, as outlined in the explanatory statement, is to ensure that no substitutable goods were produced in Australia on the date the concession was applied for, thereby benefiting the applicant and potentially importers of these goods.
Scope and Application
The Tariff Concession Instrument No. 0612697 under the Customs Act 1901 applies specifically to certain gas bottle covers. This Act authorises the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCO) that lower the rate of customs duty on goods, provided certain criteria are met. The Act applies to entities and individuals who import or intend to import the specified goods and directly affects the importation process for these goods. The geographic reach of this legislation is national, as it is a Commonwealth Act. The application process requires that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is made. Exclusions under this Act include goods specified in section 269SJ, which cannot be subject to a TCO. The Act also extends its application through subordinate instruments, which can provide further definitions and regulations on terms such as 'substitutable goods' and 'ordinary course of business'. The TCO in question came into force on the date of the application, 31 July 2006, and does not affect any pre-existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. A TCO reduces the customs duty on certain goods. An applicant can request a TCO under section 269F, provided the goods are not excluded under section 269SJ. The CEO must assess if the application meets the core criteria, which include ensuring no substitutable goods are produced in Australia (section 269C). Definitions for terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269D, 269E, and 269B respectively. If the core criteria are satisfied, the CEO must issue a TCO, specifying the applicable tariff item from Schedule 4 of the Customs Tariff Act 1995, as outlined in subsection 269P(3).
Entities and individuals governed by the Act must ensure their applications for TCOs are complete and meet all criteria set out in the Act. This involves verifying that no substitutable goods are produced in Australia and that the goods in question are not excluded under section 269SJ. Additionally, the CEO is required to publish a notice in the Gazette under subsection 269K(1) inviting submissions on the proposed TCO. This notice must be published as soon as practicable after accepting the application as valid. The TCO itself takes effect from the date the application was lodged, as stated in subsection 269S(1).
The Act does not impose any penalties for failing to meet the criteria for a TCO application; however, it does specify that a TCO cannot disadvantage any person other than the Commonwealth or impose liabilities on them for actions taken before the TCO's registration. Importers, however, benefit from the TCO as they can apply for a refund of duty on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations. The CEO's decision to issue a TCO is subject to the application meeting all stipulated criteria, and no submissions were received in response to the notice published for TCO No. 0612697.