EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619397
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.
Alcan Gove Development Pty Ltd applied for a TCO in respect of certain alumina plant digestion mixers on 7 December 2006.
Instrument
TCO No 0619397 was made on 2 March 2007. It declares that those certain alumina plant digestion mixers 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. 0619397 is taken to have come into force on 7 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, establishes a framework for tariff concession orders (TCOs) that provide lower rates of customs duty on specific goods. The primary objective of this legislation is to encourage the importation of certain goods by reducing their tariff rates, provided that no substitutable goods are produced in Australia. The explanatory statement for Tariff Concession Instrument No. 0619397 highlights that this particular instrument was introduced to address the application by Alcan Gove Development Pty Ltd for a TCO concerning certain alumina plant digestion mixers. The instrument was made on 2 March 2007, and it declared that these mixers would be subject to a zero percent duty rate, down from the general rate of five percent, as the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia. The instrument came into effect on 7 December 2006, the date the application was lodged, and it benefits importers by allowing them to apply for duty refunds on goods imported since that date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act applies to individuals or entities seeking tariff concessions on specific goods, provided these goods are not listed under section 269SJ of the Act, which excludes certain goods from the concession scheme. The geographic and jurisdictional reach of the Act is national, operating under the Commonwealth jurisdiction. The Act stipulates that if a TCO application meets the core criteria, such as the absence of substitutable goods produced in Australia, a TCO can be issued reducing the duty rate on the specified goods. The application process requires the applicant to demonstrate that the goods in question have no Australian-made equivalents that could be used for the same purpose. The TCO, once issued, becomes effective on the date the application was lodged, and it does not retroactively affect the rights of any parties other than the Commonwealth, nor does it impose any liabilities on individuals or entities for actions taken prior to the issuance of the TCO. This legislation allows for the dynamic adjustment of tariffs through subordinate instruments, enabling the Customs Executive to respond to specific economic and industrial needs by modifying duty rates on certain imported goods.
Key Provisions
The primary sections of the Customs Act 1901 that pertain to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269SJ (269C, 269F, 269P, 269SJ). Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods in question are not those specified in section 269SJ. Section 269C stipulates that a TCO application meets the core criteria if, at the time of application, no substitutable goods were produced in Australia. If the CEO determines that the application meets these criteria, section 269P mandates the creation of a written TCO.
The obligations imposed on parties by this legislation include the requirement for applicants to ensure that their applications meet the core criteria as defined by section 269C. The CEO must assess each application against these criteria, which include the non-existence of substitutable goods produced in Australia. Additionally, the CEO is obligated to publish a notice in the Gazette under section 269K(1) inviting submissions from any interested parties, although this step is not mandatory if no submissions are received. Furthermore, the Act stipulates that a TCO comes into force on the date the application was lodged (subsection 269S(1)).
In terms of enforcement, the Customs Act 1901 does not explicitly outline specific offences or penalties for breaches related to TCOs. However, general provisions within the Act and the Customs Regulations 1993 may apply to any breaches of customs regulations. Violations of these regulations could potentially lead to civil or criminal penalties, including fines and imprisonment, depending on the severity and intent of the breach. The specific penalties are not detailed within the text of this Explanatory Statement but are governed by the broader legislative framework.