EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618761
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.
Signum Specialties Pty Ltd applied for a TCO in respect of certain extruders on 22 November 2006.
Instrument
TCO No 0618761 was made on 2 March 2007. It declares that those certain extruders 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. 0618761 is taken to have come into force on 22 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 provide a framework for the regulation of customs and excise, including the imposition and collection of duties and taxes on imported and exported goods. A notable feature of the Act is Part XVA, which allows for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders grant preferential tariff treatment to certain goods, provided they meet specific criteria outlined in the Act. This legislative instrument addresses the need to provide tariff relief for imported goods that are not domestically produced, thereby supporting economic efficiency and encouraging the import of goods that would otherwise be prohibitively expensive. The Tariff Concession Instrument No. 0618761, enacted by the relevant authority within the framework of the Customs Act, aims to reduce the duty on specific extruders to zero percent, reflecting the policy objective of facilitating trade by lowering the cost of importing these particular goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to goods specified in the application, provided the application is not for goods listed in section 269SJ, which are ineligible for TCOs. The application process requires the CEO to determine if the goods in question meet the core criteria, primarily that no substitutable goods are produced in Australia at the time of application. If satisfied, a TCO is issued, effectively applying a lower rate of customs duty to the specified goods. This Act applies to any individual or entity seeking to import goods that may qualify for tariff concessions, thereby directly affecting importers who benefit from the potential duty reduction or refund. The TCOs are nationally applicable across Australia, aligning with the overarching customs regulations set forth in the Customs Act and its subordinate instruments.
The application of TCOs is further defined and potentially extended by regulations and orders under the Customs Tariff Act 1995. These subordinate instruments can provide additional clarity or specific conditions for the application of TCOs, ensuring a consistent and predictable regime for all stakeholders involved in the importation process. Notably, the Act ensures that the implementation of a TCO does not adversely affect existing rights or impose new liabilities on any person other than the Commonwealth, safeguarding the interests of importers and other affected parties.
Key Provisions
The primary sections of the Customs Act 1901, as modified by Tariff Concession Instrument No. 0618761, allow the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) that reduce customs duty rates on specified goods. Section 269F permits an application for a TCO, provided the goods are not those specified in section 269SJ, which cannot be subject to a TCO. Section 269C states that an application meets the core criteria if, on the application date, no substitutable goods were produced in Australia. If the CEO is satisfied that the application meets the criteria, they must make a written order (TCO) under section 269P(3), specifying the reduced duty rate.
The Act imposes several obligations on parties and entities it governs. The CEO must assess each TCO application to determine if it meets the core criteria outlined in section 269C, and ensure that the goods are not those excluded under section 269SJ. Once a TCO is issued, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit their views. The CEO must then consider these submissions before finalising the TCO. Importers of the goods subject to a TCO may apply for a refund of duty paid under Regulation 126(1)(r), provided the goods were imported after the TCO came into force.
Failure to comply with the provisions of the Customs Act 1901 can lead to various consequences. Under section 275, any person who contravenes a provision of the Act may be subject to penalties. The maximum penalty for an individual is $22,200, or for a body corporate, $111,000. In addition to financial penalties, breaches of the Act can result in criminal charges, leading to further penalties as determined by the court. The Act also provides for civil consequences, such as the recovery of any unremitted duty, interest, and costs incurred by the Commonwealth.
In summary, the Tariff Concession Instrument No. 0618761 facilitates a process whereby certain goods can benefit from reduced customs duty rates, provided the application meets the core criteria. The CEO plays a critical role in assessing applications and issuing TCOs, while also ensuring that the rights of all parties are considered. Failure to comply with the Act's provisions can result in significant penalties, both civil and criminal, underscoring the importance of adherence to its requirements.