EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0614833
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.
Car-O-Liner Pty Ltd applied for a TCO in respect of certain spot welders on 27 October 2006.
Instrument
TCO No 0614833 was made on 19 January 2007. It declares that those certain spot welders 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. 0614833 is taken to have come into force on 27 October 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, governs the regulation and administration of customs and excise in Australia. In 2007, an Explanatory Statement was issued for Tariff Concession Instrument No. 0614833, which aimed to address the problem of ensuring fair and effective tariff concessions for specific goods. This instrument was introduced to provide a mechanism for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), granting lower rates of customs duty for certain goods, provided they meet the specified criteria. The policy objective is to support Australian industries by reducing the cost of imported goods that have no local substitutes, thereby promoting competition and economic efficiency. The process requires the CEO to assess applications and consider public submissions before making a decision, ensuring transparency and accountability in the tariff concession scheme.
Scope and Application
The Customs Act 1901 applies to the customs duty imposed on imported goods, with a particular focus on the scheme under which Tariff Concession Orders (TCOs) are made by the Chief Executive Officer of Customs. This legislation is applicable to any person or entity seeking to import goods that may qualify for a tariff concession. The geographic and jurisdictional reach of the Act is Commonwealth-wide, and it applies to all entities within Australia, including businesses, importers, and other stakeholders involved in the importation process. The Act allows for the exemption of certain goods from the standard customs duty if specific criteria are met, such as the absence of substitutable goods produced in Australia. This concession is outlined under section 269F and further defined by the core criteria set out in sections 269C, 269B, and 269D. The Act extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty applicable to the goods in question. Exclusions under section 269SJ prevent certain goods from being subject to a TCO, ensuring that the concessions are appropriately targeted. The legislation ensures that any TCO does not disadvantage existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of this legislation are sections 269C, 269P, and 269S of the Customs Act 1901. Section 269C stipulates the core criteria that must be met for a Tariff Concession Order (TCO) application to be considered valid. It requires that, on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. Section 269P mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these core criteria, they must issue a written order (a TCO) that applies a prescribed item of Schedule 4 to the Customs Tariff Act 1995 to the goods in question. Finally, section 269S outlines the commencement date of the TCO, which is the day the application is lodged.
These sections impose obligations on both the applicant and the CEO. The applicant must ensure their application meets the core criteria outlined in section 269C, specifically demonstrating that no substitutable goods are produced in Australia at the time of application. The CEO, on receiving a valid application, must make a written order declaring the applicable tariff concession if they are satisfied that the core criteria are met. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as outlined in section 269K(1).
The legislation does not explicitly state any offences, penalties, or civil/criminal consequences for breaches of the Act or the TCO. However, non-compliance with the terms of the TCO or failure to meet the core criteria could potentially lead to disputes or challenges regarding the validity of the TCO. Importers who fail to apply for a refund of duty under paragraph 126(1)(r) of the Regulations might miss out on the benefits provided by the TCO. Additionally, if the CEO fails to adhere to the statutory requirements for issuing a TCO, such as not publishing the required notice in the Gazette, this could lead to legal challenges regarding the validity of the TCO.
In conclusion, the primary focus of this legislation is to establish a clear process for applying for and issuing Tariff Concession Orders to reduce customs duty on specific goods, provided certain conditions are met. It outlines the responsibilities of both applicants and the CEO, and while it does not specify penalties for breaches, non-compliance could lead to disputes and missed opportunities for tariff relief.