EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619301
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 Environmental Services applied for a TCO in respect of certain amphibious harvesters and cleaners on 04 December 2006.
Instrument
TCO No 0619301 was made on 05 March 2007. It declares that those certain amphibious harvesters and cleaners 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. 0619301 is taken to have come into force on 04 December 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 Parliament of Australia, provides a framework for the administration of customs and excise duties, and includes provisions for Tariff Concession Orders (TCOs). The 2007 Tariff Concession Instrument No. 0619301 was introduced to address the specific need for tariff concessions on certain amphibious harvesters and cleaners, which Australian Environmental Services applied for on 04 December 2006. This instrument was created in response to the application under section 269F of the Customs Act 1901, where the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thereby satisfying the core criteria for the concession. The instrument declares that these specific goods are subject to a 5% duty rate as per item 50 of Schedule 4 to the Customs Tariff Act 1995, although the concession reduces this rate to free for the specified goods. The instrument came into force on the date of the application, 04 December 2006, and does not affect the rights of any person except to beneficially impact importers who can apply for a refund of duty on goods imported since the concession came into effect.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking to import goods that qualify for reduced customs duty rates under a TCO, provided that the goods are not specified in section 269SJ of the Act, which excludes certain items from TCO eligibility. The application of the Act is national in scope, as it is a Commonwealth statute. The Act stipulates that a TCO application will be considered by the CEO if no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged. Exclusions are explicitly detailed in section 269SJ, which lists the goods that cannot be subject to a TCO. Additionally, the Act allows for the extension or restriction of application through subordinate instruments, as implied by the process of making TCOs, which involves written orders specifying the goods and the prescribed tariff items under the Customs Tariff Act 1995.
Key Provisions
The key provisions of this instrument, Tariff Concession Instrument No. 0619301, revolve around the granting of tariff concession orders (TCOs) under the Customs Act 1901. Section 269F allows for an application to be made by a person to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. This process is subject to certain criteria, most notably that the goods must not be specified in section 269SJ of the Act (section 269F). If the CEO is satisfied that the application meets the core criteria, as outlined in sections 269C, 269B, and 269D of the Act, the CEO is required to issue a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). In this instance, the CEO granted a TCO for certain amphibious harvesters and cleaners, specifying that these goods are subject to item 50 of Schedule 4, resulting in a tariff rate of free duty, down from the general rate of 5%.
The obligations imposed by this Act on the parties or entities it governs are primarily centred around the application process for TCOs. Applicants must ensure their applications meet the criteria specified in sections 269C, 269B, and 269D, and the CEO must evaluate these applications against these criteria. The CEO is also required to publish a notice in the Gazette inviting submissions on the application as soon as practicable after accepting it as valid (subsection 269K(1)). In this case, the CEO did not receive any submissions in response to the published notice for the application regarding amphibious harvesters and cleaners.
Under the Customs Act 1901, breaches of the conditions set out in the TCO could lead to various civil and criminal consequences. However, the explanatory statement does not detail specific offences, penalties, or consequences for breach in relation to this particular TCO. It is important to note that the rights of importers will be beneficially affected, with the ability to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations. Additionally, the TCO does not impose any liabilities on any person.