EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615754
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.
Alcan Gove Development Pty Ltd applied for a TCO in respect of certain cooling tower manifolds on 11 October 2006.
Instrument
TCO No 0615754 was made on 22 December 2006. It declares that those certain cooling tower manifolds 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. 0615754 is taken to have come into force on 11 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, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders are designed to address the problem of imposing a lower rate of customs duty on specific goods, provided certain criteria are met. This mechanism is particularly aimed at ensuring that Australian businesses are not unduly burdened by tariffs on goods for which no domestic alternatives exist. The Tariff Concession Instrument No. 0615754, issued under this Act, exemplifies the process by which such concessions are granted, as it was enacted to provide a zero-rate duty on certain cooling tower manifolds after it was determined that no substitutable goods were produced in Australia. The policy objective of these concessions is to foster competitive markets and support industries by reducing the cost of imported goods, thereby encouraging economic growth and efficiency.
Scope and Application
The Tariff Concession Instrument No. 0615754, issued under the Customs Act 1901, applies to individuals or entities seeking tariff concessions on specific goods imported into Australia. The Act facilitates the application for Tariff Concession Orders (TCOs) by individuals or entities to the Chief Executive Officer of Customs, provided the goods in question are not specified in section 269SJ of the Act as ineligible for concession. The instrument specifically addresses the application by Alcan Gove Development Pty Ltd for a TCO concerning certain cooling tower manifolds, reducing the duty rate from 5% to 0% as no substitutable goods were produced in Australia. The application of the TCO is governed by the jurisdictional reach of the Commonwealth, and the TCO's effective date aligns with the date the application was lodged, in this case, 11 October 2006. The instrument does not disadvantage or impose liabilities on any person other than the Commonwealth, and it does not affect existing rights as at the date of registration. Importers of the specified goods will benefit from the TCO by being eligible to apply for a refund of duty on imports made since the TCO's effective date.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a scheme through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer (CEO) of Customs (section 269F). These orders reduce the rate of customs duty on specified goods. To qualify for a TCO, the application must meet the core criteria outlined in section 269C, which requires that, at the time of application, no substitutable goods are produced in Australia in the ordinary course of business. The definitions for these terms are provided in sections 269D, 269E, and 269B. If the CEO determines that the application meets these criteria, they must issue a written TCO declaring that the specified goods will be subject to a prescribed item of Schedule 4 of the Customs Tariff Act 1995 (subsection 269P(3)).
Entities and individuals must comply with the requirements set by the Customs Act 1901 when applying for a TCO. Specifically, applicants must ensure that their application is not for goods listed in section 269SJ, which are ineligible for a TCO. Additionally, they must demonstrate that the goods in question are not substitutable by any Australian-produced goods, as defined by sections 269D and 269E. Compliance also involves providing any required information and evidence to support the application, as outlined by the CEO. If the CEO is satisfied with the application, they are mandated to issue a TCO as per section 269C.
The Act outlines various consequences for non-compliance or breach of its provisions. If a person fails to adhere to the requirements of a TCO or misuses the concession, they may face legal ramifications. Section 269M of the Customs Act 1901 specifies that failure to comply with a TCO can lead to civil penalties, including fines and potential imprisonment. Additionally, subsection 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions against the TCO application. If the CEO does not receive any valid submissions, the TCO will proceed as issued. The Act also provides that the TCO does not affect the rights of any person as at the date of registration, ensuring that no existing rights or liabilities are adversely impacted by the concession.