EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616877
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 preform injection moulder parts on 6 September 2006.
Instrument
TCO No 0616877 was made on 24 November 2006. It declares that those certain preform injection moulder parts 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. 0616877 is taken to have come into force on 6 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, establishes a framework for the regulation of customs duties, including the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs). The 2006 Tariff Concession Instrument No. 0616877 addresses the problem of ensuring that tariff concessions are granted only when appropriate, specifically in cases where no substitutable goods are produced in Australia. The objective is to facilitate trade by providing lower rates of customs duty on certain goods, thereby encouraging economic activity and international trade. This particular instrument was introduced after Visy Industries Pty Ltd applied for a concession on preform injection moulder parts, resulting in a tariff reduction from 5% to 0%. The instrument was effective from the date of application, 6 September 2006, and did not disadvantage any existing rights or impose new liabilities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply reduced rates of customs duty to certain goods. This provision applies to any individual or entity seeking to import goods that meet the criteria for tariff concessions, provided that these goods are not specified in section 269SJ of the Act as ineligible for such concessions. The application process requires that no substitutable goods are being produced in Australia at the time of application, as per section 269C, which hinges on definitions set out in sections 269D, 269E, and 269F. Once an application is deemed to meet the core criteria, a TCO is issued, which retroactively applies to the date of the application under section 269S(1). The application of TCOs is nationwide, impacting all states and territories within Australia, but it does not affect any pre-existing rights or liabilities of individuals or entities aside from the Commonwealth. For instance, TCO No. 0616877, which pertains to specific preform injection moulder parts, was issued after a successful application by Visy Industries Pty Ltd and resulted in a duty reduction from 5% to 0% for these goods. The application process involves public notification, allowing interested parties to voice any objections, although in this case, no submissions were received.
Key Provisions
The Tariff Concession Instrument No. 0616877, under section 269P(3) of the Customs Act 1901, sets out the procedure for granting tariff concessions on certain goods. Specifically, the instrument declares that certain preform injection moulder parts are subject to a zero rate of customs duty, as opposed to the general 5% duty, provided the Chief Executive Officer (CEO) of Customs is satisfied that no substitutable goods were produced in Australia on the date the application was lodged. Section 269C further clarifies that a tariff concession order (TCO) application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business.
The obligations imposed on the parties governed by this legislation include ensuring that any application for a tariff concession order is made in accordance with the requirements set out in the Customs Act 1901. Specifically, under section 269F, a person can apply for a TCO, but the CEO must determine whether the application meets the core criteria stipulated in section 269C. Additionally, section 269K(1) mandates that the CEO must publish a notice in the Gazette, inviting any interested parties to lodge submissions regarding the application. Once the CEO is satisfied that the application meets the criteria, they must make a written order, as specified in section 269P(3), declaring the goods to which the prescribed tariff item applies.
Failure to comply with the requirements of the Customs Act 1901 and the specific provisions of the TCO can lead to civil and criminal consequences. Although the explanatory statement does not detail specific offences or penalties, breaches of customs regulations can generally result in significant fines and potential imprisonment, as stipulated in other sections of the Customs Act. The CEO's decision to grant or deny a TCO can also be subject to judicial review, which may lead to further legal consequences if the decision is found to be unreasonable or unlawful.
Overall, the Tariff Concession Instrument No. 0616877, along with the relevant sections of the Customs Act 1901, establishes a clear framework for the application and approval of tariff concessions, ensuring that the process is transparent and that all interested parties have the opportunity to be heard. The rights of importers are specifically protected, as they can apply for a refund of duty on goods imported since the TCO came into effect, as outlined in paragraph 126(1)(r) of the Regulations.