EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616373
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.
Visy Industries Pty Ltd applied for a TCO in respect of certain stackers on 1 September 2006.
Instrument
TCO No 0616373 was made on 24 November 2006. It declares that those certain stackers 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. 0616373 is taken to have come into force on 1 September 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 Parliament of Australia, provides a framework for the administration of customs and excise duties in Australia. Part XVA of the Act introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to lower the rate of customs duty on certain goods. This mechanism was introduced to address the issue of ensuring that Australian businesses do not face undue competitive disadvantage when importing goods that are not produced domestically. The policy objective is to promote economic efficiency and competitiveness by ensuring that Australian industries have access to competitively priced imported goods where local production is not feasible or economically viable. Tariff Concession Instrument No. 0616373 was enacted under this legislative framework to provide a zero per cent duty rate on certain stackers, effective from 1 September 2006, after Visy Industries Pty Ltd successfully applied for a TCO.
Scope and Application
The Tariff Concession Instrument No. 0616373 applies to the customs duty regime concerning the importation of specific goods, in this case, certain stackers, as outlined in the Customs Act 1901. This legislation allows for a lower rate of customs duty to be applied to goods that are the subject of a Tariff Concession Order (TCO), provided the application meets the core criteria set forth in the Act. The scope of this Act includes individuals or entities seeking to import goods that may benefit from tariff concessions, and it extends to those goods that are not produced domestically and do not have substitutable alternatives. The geographic reach of the Act is national, as it operates under the Commonwealth of Australia’s customs laws. The Act does not specify any exclusions or exemptions beyond those outlined in section 269SJ of the Customs Act 1901, which identifies goods ineligible for TCOs. The application of this Act can be extended or restricted through subordinate instruments, such as regulations, which provide further detail on the administration and enforcement of tariff concessions.
Key Provisions
The main operative sections of this legislation, particularly sections 269C, 269F, and 269P, establish the framework for the application and approval of Tariff Concession Orders (TCOs). According to section 269F, an applicant can apply to the Chief Executive Officer of Customs (CEO) for a TCO for certain goods. Section 269C stipulates that the application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets the core criteria, they must issue a written order under section 269P(3) declaring that the goods in question are subject to the TCO, thereby applying a reduced rate of customs duty as specified in the Customs Tariff Act 1995.
Under the Customs Act 1901, the obligations imposed on the parties involved include the requirement for the CEO to assess whether an application for a TCO meets the core criteria as outlined in section 269C. The CEO must also publish a notice in the Gazette inviting submissions from any person who may have concerns about the proposed TCO, as required by section 269K(1). The applicant, in this case Visy Industries Pty Ltd, must ensure their application is complete and meets the statutory criteria. Additionally, any interested parties who respond to the published notice must submit their submissions to the CEO within the specified timeframe.
Should there be any breach of the requirements set out in the Customs Act 1901, including the improper application for a TCO or the failure to comply with the conditions set by the CEO, there could be significant consequences. While the specific penalties for breach are not detailed in the explanatory statement, breaches of customs regulations generally may lead to civil or criminal penalties, including fines and imprisonment. The maximum penalties for such breaches would be determined by the relevant sections of the Customs Act 1901 and any other applicable legislation. It is important for all parties involved to adhere to the prescribed procedures to avoid potential legal repercussions.