EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618694
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.
Australian Automotive Air Pty Ltd applied for a TCO in respect of certain flux powder applicators on 21 November 2006.
Instrument
TCO No 0618694 was made on 09 February 2007. It declares that those certain flux powder applicators 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 free.
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. 0618694 is taken to have come into force on 21 November 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 was enacted to facilitate the regulation of customs and excise duties and provides a framework for the administration of tariffs. The Act was introduced to address the need for a streamlined process to provide tariff concessions on certain goods, ensuring that Australian industries can compete more effectively in the global market without the burden of excessive customs duties. Pursuant to the Customs Act, the Tariff Concession Instrument No. 0618694 was made by the Chief Executive Officer of Customs under section 269P(3) of the Act, following an application by Australian Automotive Air Pty Ltd for a Tariff Concession Order (TCO) on 21 November 2006. The policy objective, as stated in the explanatory statement, is to provide a tariff concession for certain flux powder applicators, reducing the general duty rate of 5% to free, provided that no substitutable goods were produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 0618694 under the Customs Act 1901 applies specifically to certain flux powder applicators as identified by Australian Automotive Air Pty Ltd in their application submitted on 21 November 2006. The Act facilitates tariff concessions for goods that are not produced in Australia in the ordinary course of business and for which no substitutable goods exist domestically. The instrument was made on 9 February 2007, declaring these specific applicators to be subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, contrasting with the general duty rate of 5%. The application of the Tariff Concession Order (TCO) is retrospective to the date of the application, ensuring that no existing rights or liabilities of any parties, except the Commonwealth, are adversely affected by the concession. This legislation primarily benefits importers by potentially allowing them to claim refunds on duties paid on the relevant goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation pertain to the process for making Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901 (sections 269C, 269F, 269K, 269P, and 269S). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria, which includes ensuring no substitutable goods are produced in Australia in the ordinary course of business (section 269C), the CEO must make a written TCO. The TCO then applies a lower rate of customs duty on the specified goods, as determined by the prescribed item in Schedule 4 of the Customs Tariff Act 1995. This TCO No. 0618694 was made for certain flux powder applicators, applying item 50 of the Tariff and reducing the duty rate from 5% to free.
The Act imposes several obligations and requirements on the parties involved. The CEO must decide whether a TCO application meets the core criteria and, if satisfied, make a written order (section 269P(3)). Additionally, as soon as practicable after accepting a TCO application as valid, the CEO must publish a notice in the Gazette, inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). Furthermore, the CEO must ensure that 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 (subsection 269S(1)). In this instance, the CEO did not receive any submissions opposing the TCO.
Under the Customs Act 1901, breaches of the provisions related to TCOs may result in various consequences. The specific offences and penalties are not detailed in the provided text, but generally, unauthorised importation of goods or incorrect declaration of goods can lead to civil or criminal penalties. These penalties could include fines and, in some cases, imprisonment. The maximum penalties would depend on the specific nature of the breach and the discretion of the courts. The Customs Act and associated regulations provide the framework for these penalties, ensuring compliance with the terms of any TCO.