EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618922
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.
ITW Buildex applied for a TCO in respect of certain drill point dies on 24 November 2006.
Instrument
TCO No 0618922 was made on 2 March 2007. It declares that those certain drill point dies 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. 0618922 is taken to have come into force on 24 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 by the Australian Parliament to provide a framework for the collection of customs duties and the regulation of imports and exports. A specific feature of the Act is the ability to grant tariff concessions through Tariff Concession Orders (TCOs), which can reduce the customs duty on certain goods. The problem or gap addressed by this legislation is to provide a mechanism for lowering customs duties on goods where no substitutable goods are produced in Australia. This is intended to support industries by making imported goods more competitive. The Tariff Concession Instrument No. 0618922, made under the Customs Act 1901, provides a practical example of this mechanism by reducing the duty on certain drill point dies from 5% to 0%, effective from the date the application was lodged. This reduction aims to benefit importers by allowing them to claim refunds for duties paid on these goods since the concession came into force. The policy objective is to support Australian industries by making imported goods more affordable and competitive, without imposing any liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, specifically through Part XVA, outlines the procedures for making Tariff Concession Orders (TCOs), which provide lower rates of customs duty for certain goods. This Act applies to individuals and entities seeking to import specific goods into Australia, provided those goods are not prohibited from tariff concessions under section 269SJ. The application process requires the Chief Executive Officer of Customs (CEO) to assess whether the goods are substitutable by Australian-made products, as defined under sections 269D and 269E. If no substitutable goods are produced in Australia, and the application meets the core criteria under section 269C, a TCO is issued under section 269P(3). This legislative mechanism ensures that the tariff rates for the specified goods are reduced to zero, as seen in Tariff Concession Order No. 0618922, which applies to certain drill point dies. The scope of this Act is national, affecting all imports subject to the conditions outlined, and it does not impose any liabilities on persons other than the Commonwealth. Furthermore, the Act mandates the CEO to publish notices in the Gazette inviting public submissions on TCO applications, although in the case of TCO No. 0618922, no objections were raised.
Key Provisions
The Customs Act 1901, specifically Part XVA, allows for the establishment of Tariff Concession Orders (TCOs) through which lower rates of customs duty can be applied to certain goods. When an application is submitted to the Chief Executive Officer of Customs (CEO) under section 269F, the CEO evaluates the application against core criteria to determine eligibility for a TCO. According to section 269C, a TCO application is eligible if, on the date the application is lodged, no substitutable goods are being produced in Australia in the ordinary course of business. The definitions of "substitutable goods," "goods produced in Australia," and "ordinary course of business" are detailed in sections 269D, 269E, and 269F of the Act respectively. If the CEO is satisfied that the application meets these criteria, they are required under subsection 269P(3) to issue a written order that declares the goods to which a specific rate of duty applies, as outlined in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the CEO include the requirement to publish a notice in the Gazette, inviting any interested parties to submit objections to the proposed TCO within a specified timeframe (subsection 269K(1)). In the case of TCO No 0618922, no objections were received following the publication of the notice. The TCO itself is deemed to have come into force on the date the application was lodged, in accordance with subsection 269S(1). This means that for ITW Buildex’s application regarding drill point dies, the TCO was effective from 24 November 2006. Importantly, the TCO does not affect the rights of any person other than the Commonwealth concerning actions taken prior to the registration date, and it does not impose any liabilities on individuals or entities other than the Commonwealth.
Failure to comply with the requirements of the Customs Act 1901 or the associated regulations can result in various penalties and consequences. While specific offences and penalties related to TCOs are not detailed in the provided text, breaches of the Customs Act generally may result in fines or imprisonment, depending on the severity of the offence. The maximum penalties for contraventions of the Customs Act can vary widely, from fines of up to $22,200 for minor offences to more substantial fines and imprisonment for serious breaches. These penalties underscore the importance of adhering to the statutory requirements and the potential legal ramifications for non-compliance.