EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617946
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.
Boral Asphalt applied for a TCO in respect of certain asphalt granulators on 25 October 2006.
Instrument
TCO No 0617946 was made on 12 January 2007. It declares that those certain asphalt granulators 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. 0617946 is taken to have come into force on 25 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 Tariff Concession Instrument No. 0617946, enacted in 2007, is a legislative instrument under the Customs Act 1901 designed to provide relief to importers of certain goods by reducing the applicable customs duty. This instrument was introduced to address the specific need to facilitate trade by lowering the tariff on goods for which no substitutable Australian-made alternatives exist. The Customs Act 1901 allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which provide a lower rate of customs duty for goods specified in the order. In this case, the instrument was made in response to an application by Boral Asphalt for a TCO concerning certain asphalt granulators. The instrument was published in the Gazette, inviting submissions, but none were received. The order came into effect on the date the application was lodged, providing a zero percent duty rate on the specified asphalt granulators, down from the general rate of five percent. This legislative measure aims to support the import of goods that are not produced domestically, thus encouraging trade and benefiting importers by potentially allowing for duty refunds on previously imported goods.
Scope and Application
The Tariff Concession Instrument No. 0617946 under the Customs Act 1901 applies to the specific case of Boral Asphalt's application for a Tariff Concession Order (TCO) concerning certain asphalt granulators, effective from 25 October 2006, the date on which the application was lodged. This legislation facilitates the application process for TCOs by the Chief Executive Officer of Customs, provided that the application meets the core criteria outlined in section 269C of the Act, which includes the absence of substitutable goods produced in Australia. The instrument declares that the asphalt granulators in question are subject to a zero percent customs duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, contrasting with the general rate of 5% for such goods. The application process requires public consultation as per subsection 269K(1) of the Act, although no submissions were received for this particular TCO. The TCO is designed to benefit importers by potentially allowing them to apply for a refund of duties paid on the goods since the date of the TCO's commencement, without imposing any liabilities on any party other than the Commonwealth.
Key Provisions
The Customs Act 1901 (the Act) allows for the creation of Tariff Concession Orders (TCOs) under Part XVA. These orders provide for lower customs duty rates on specific goods (s 269F). An application for a TCO can be submitted to the Chief Executive Officer of Customs (the CEO) (s 269F). The CEO is required to consider whether the application meets the core criteria if the goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The core criteria are met if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). The definitions of ‘goods produced in Australia’, ‘ordinary course of business’ and ‘substitutable goods’ are provided in sections 269D, 269E and 269F respectively. If the CEO determines that the application meets the core criteria, a written TCO must be issued (s 269P(3)).
Under the Act, the CEO has several obligations when processing a TCO application. The CEO must first verify that the application pertains to goods that are not listed in section 269SJ of the Act and then assess whether the application meets the core criteria set out in section 269C (s 269F). If the CEO is satisfied that the application meets these criteria, the CEO must issue a TCO (s 269P(3)). Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any person who believes there are reasons why the TCO should not be made to submit a submission to the CEO (s 269K(1)). The CEO must also consider any submissions received in response to this notice (s 269K(1)).
Failure to comply with the requirements of the Act or the TCO may result in civil or criminal consequences. Civil penalties may be imposed for non-compliance with the Act, although specific penalties are not stated in the text. Criminal penalties may also apply for serious breaches of the Act, again with specific penalties not provided in the text. The text does not detail specific offences or penalties related to the TCO itself, but it is implied that breaches of the Act or the TCO could lead to legal action. The exact nature and severity of these penalties would be determined by the relevant courts based on the specific circumstances of the breach.