EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617406
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.
Simcoa Operations applied for a TCO in respect of certain tap hole drills on 19 September 2006.
Instrument
TCO No 0617406 was made on 15 December 2006. It declares that those certain tap hole drills 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. 0617406 is taken to have come into force on 19 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 Tariff Concession Instrument No. 0617406, enacted in 2006, was introduced to provide relief under the Customs Act 1901 by reducing the customs duty on certain tap hole drills for Simcoa Operations. The Customs Act 1901 established a scheme for Tariff Concession Orders (TCOs), which allow for a lower rate of customs duty on specified goods. The instrument was enacted following an application by Simcoa Operations to the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia, meeting the core criteria for a TCO. As a result, the CEO issued the TCO, setting the duty rate at 0% for these specific goods, down from the general rate of 5%. The instrument was published in the Gazette, inviting submissions, but none were received, leading to its enactment.
This legislation was introduced by the relevant authority within the framework of the Customs Act 1901, aiming to facilitate the importation of goods by reducing the financial burden on importers. The policy objective is to support businesses by lowering the cost of importing specific goods, thereby encouraging trade and economic activity without imposing additional liabilities on importers or affecting their existing rights.
Scope and Application
The Tariff Concession Instrument No. 0617406, made under Part XVA of the Customs Act 1901, applies specifically to certain tap hole drills. This instrument was enacted to provide tariff concessions for these goods, reducing the customs duty rate from the general rate of 5% to 0%. The instrument applies to entities and individuals involved in the importation of these specific goods into Australia. The scope of the Act extends to the Commonwealth level, impacting the customs duty regime across the nation. The application of this concession does not extend to goods specified in section 269SJ of the Act, which cannot be subject to a tariff concession order. Furthermore, the application process requires that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged, as per sections 269C and 269D of the Act. The instrument came into effect on 19 September 2006, the date on which the application was lodged, and it does not impose any liabilities or affect the rights of any person in relation to actions taken prior to its registration. Importers of the specified goods can benefit from this concession by applying for a refund of duty paid on goods imported since the effective date of the order.
Key Provisions
The Tariff Concession Order No. 0617406, made under section 269F of the Customs Act 1901, pertains to certain tap hole drills. This order was issued by the Chief Executive Officer of Customs (CEO) after Simcoa Operations applied for tariff concessions on these goods on 19 September 2006. The order was finalised on 15 December 2006, declaring that the specified tap hole drills are subject to a zero percent duty rate, as opposed to the general rate of 5% (section 269P(3)). This concession applies to goods imported from the date the order was deemed to come into force, which is the date the application was lodged, as per subsection 269S(1) of the Act.
The obligations imposed by this Act on parties such as Simcoa Operations and other potential applicants include ensuring that the goods in question do not have substitutable counterparts produced in Australia at the time of application. This is a core criterion specified under section 269C of the Act. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties once an application is accepted as valid, as per subsection 269K(1). The CEO must also determine if the application meets the core criteria as defined in section 269C, which requires the absence of substitutable goods produced in Australia at the time of application. If these conditions are met, the CEO must issue a written order in the form of a Tariff Concession Order.
Failure to comply with the provisions of the Customs Act 1901 may result in various consequences. Under the Act, any person who contravenes a provision of the Act or fails to comply with an order or direction issued under the Act may be subject to penalties. The maximum penalties for breaches can include fines, imprisonment, or both, depending on the severity of the offence. For instance, under section 211 of the Act, an individual or entity found guilty of contravening certain provisions can be fined up to 10,000 penalty units or imprisonment for up to five years, or both, for serious offences. It is essential for all parties involved to adhere to the requirements and obligations set out by the Act to avoid any legal repercussions.