EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617234
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.
Powerscreens Australasia Pty Ltd applied for a TCO in respect of certain screeners on 14 September 2006.
Instrument
TCO No 0617234 was made on 8 December 2006. It declares that those certain screeners 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. 0617234 is taken to have come into force on 14 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. Part XVA of this Act introduces the scheme for Tariff Concession Orders (TCOs), allowing the Chief Executive Officer of Customs to grant tariff concessions on certain goods. The policy objective is to facilitate the import of goods that are not produced domestically, thus supporting trade and potentially reducing costs for importers. The problem this legislation addresses is the need for a formal process to assess and grant tariff concessions where no domestic production of substitutable goods exists. Instrument TCO No. 0617234, made on 8 December 2006, is an example of this process, applying to certain screeners where no Australian-made substitutes were found. This measure aims to benefit importers by potentially lowering their duty costs and does not disadvantage or impose liabilities on any person as per the Act.
Scope and Application
The Tariff Concession Instrument No. 0617234 under the Customs Act 1901 applies to any person or entity seeking to import specific screeners into Australia. This instrument is applicable nationally and involves the concession of customs duty on these goods, with the primary aim of reducing the duty rate from the general 5% to 0% for the particular screeners specified. This concession is contingent upon the determination by the Chief Executive Officer of Customs that no substitutable goods are produced in Australia. The instrument was enacted to benefit importers by allowing them to apply for a refund of duty on the specified goods imported since the day the tariff concession order was lodged, which in this case is 14 September 2006. Notably, the instrument does not disadvantage any person by affecting their rights as they stood on the date of registration, nor does it impose any liabilities on any person aside from the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0617234, which is made under the Customs Act 1901, concern the establishment of Tariff Concession Orders (TCOs) for specific goods. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods, provided those goods are not specified in section 269SJ of the Act. If the application meets the core criteria outlined in sections 269C, 269B, and 269D, the CEO must make a written order granting the concession. In this case, the CEO satisfied that the application for screeners met the core criteria, as no substitutable goods were produced in Australia. Consequently, the CEO issued TCO No. 0617234, which applies to those certain screeners, reducing the duty rate from the general rate of 5% to 0% (section 269P(3)).
The Act imposes several obligations on the parties it governs. Firstly, the CEO must ensure that any TCO application is assessed against the core criteria, particularly verifying that no substitutable goods are being produced in Australia. In this case, the CEO confirmed that the application for screeners met these criteria. Secondly, the CEO is required to publish a notice in the Gazette inviting any person to submit reasons why the TCO should not be made. While the CEO published such a notice, no submissions were received. Finally, the Act mandates that the TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person. This means that the TCO does not disadvantage any person or impose new liabilities in respect of actions taken before the TCO was registered.
The Act outlines specific consequences for breaches of its provisions. While the explanatory statement does not detail specific offences under the Customs Act 1901 related to TCOs, it is clear that any misuse or non-compliance with the terms of a TCO could potentially result in legal action. Generally, under Australian law, failure to comply with customs regulations can lead to civil or criminal penalties. Civil penalties may include fines, and in severe cases, criminal penalties can include imprisonment. However, the maximum penalties are not specified in the explanatory statement and would need to be referred to in the relevant sections of the Customs Act 1901 and associated regulations. It is also worth noting that the Act ensures that the rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force.