EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618026
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.
BOC Gases Australia Ltd applied for a TCO in respect of certain liquefied gas on 31 October 2006.
Instrument
TCO No 0618026 was made on 12 January 2007. It declares that those certain liquefied gas 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. 0618026 is taken to have come into force on 31 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the imposition and management of customs duties, including the ability to offer tariff concessions through Tariff Concession Orders (TCOs). These concessions can reduce the customs duty payable on certain imported goods, thereby addressing the gap in the market where certain goods may be overly taxed compared to their Australian-produced counterparts or where the import of such goods is deemed beneficial for economic or strategic reasons. The legislation empowers the Chief Executive Officer of Customs to grant these concessions, provided the application meets the core criteria specified in the Act, such as the absence of substitutable goods being produced in Australia. Instrument TCO No. 0618026, made on 12 January 2007, is an example of such a concession, reducing the duty on certain liquefied gas from 5% to 0%. The policy objective behind these concessions is to facilitate the import of goods that are not produced domestically or where domestic production is insufficient, thus supporting economic activities and potentially lowering costs for consumers and businesses.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the process through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This Act applies to individuals and entities that seek to apply for a TCO for goods that are not specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. A TCO application is deemed to meet the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The application process involves the CEO making a written order that applies a lower rate of customs duty to the specified goods, provided the application meets the criteria outlined in the Act. This legislative framework is applicable nationally under the Commonwealth and extends its reach to any entity or person applying for tariff concessions on goods imported into Australia. The Act does not impose any liabilities or affect the rights of any person adversely in relation to activities occurring before the registration of a TCO, and it provides benefits such as the ability to apply for a refund of duty on imported goods under the relevant regulations.
Key Provisions
The primary operative sections of this legislation focus on the process for making Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the application is not for goods that cannot be subject to a TCO as per section 269SJ, the CEO must then assess whether the application meets the core criteria outlined in section 269C. If the CEO is satisfied that no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E, the CEO must issue a written order (section 269P(3)) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. The CEO of Customs must ensure that any TCO application is valid and meets the core criteria set out in the Act. This includes confirming that the goods in question are not substitutable goods produced in Australia. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). The CEO is also required to consider any submissions received in response to this notice. If no submissions are received, as was the case with TCO No. 0618026, the CEO proceeds to issue the order.
Any breaches of the provisions set out in the Customs Act 1901 can lead to various consequences. While the explanatory statement does not specify the exact penalties for non-compliance, it is clear that failing to adhere to the requirements could result in legal ramifications. Given the structured nature of the Act, violations might lead to civil or criminal penalties, depending on the severity and intent behind the breach. The maximum penalties for such offences would typically be determined by other relevant sections of the Customs Act 1901 and associated regulations, which could include fines or imprisonment for more serious violations. The Act ensures that the rights of importers are beneficially affected, particularly in terms of being able to apply for a refund of duty on goods imported since the TCO came into force.