EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619500
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.
BOC Gases Australia Pty Ltd applied for a TCO in respect of certain gas cylinders on 8 December 2006.
Instrument
TCO No 0619500 was made on 2 March 2007. It declares that those certain gas cylinders 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. 0619500 is taken to have come into force on 8 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 Commonwealth Parliament, provides the legal framework for the administration of customs and excise duties in Australia. The Act, through its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs), which reduce the customs duty on specified goods. This was introduced to address the gap where certain imported goods could be subject to high customs duties if no suitable Australian-made alternatives existed. The explanatory statement details Tariff Concession Instrument No. 0619500, which was issued on 2 March 2007, following an application by BOC Gases Australia Pty Ltd on 8 December 2006. The instrument applies to specific gas cylinders, reducing their duty rate from 5% to 0%, reflecting the policy objective of ensuring fair trade practices while supporting local production where feasible. The CEO of Customs made this decision after determining that no substitutable goods were produced in Australia, as required under section 269C of the Act.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) which can reduce the customs duty on specific goods. This Act applies to any person or entity seeking to import goods into Australia, provided the goods are not specified in section 269SJ of the Act as those ineligible for tariff concessions. The geographic reach of this legislation is national, as it pertains to the importation of goods into Australia. A TCO application is subject to certain core criteria, primarily ensuring that no substitutable goods are produced in Australia at the time of application. The Chief Executive Officer of Customs (CEO) is responsible for determining whether an application meets these criteria and subsequently making the order if satisfied. The instrument in question, TCO No. 0619500, was made for certain gas cylinders, effectively reducing their customs duty from 5% to 0%. This TCO came into force on the date the application was lodged, 8 December 2006, and does not disadvantage any person or impose new liabilities on anyone in relation to actions prior to its commencement. Importers, however, stand to benefit from this concession, as they may apply for duty refunds on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901, particularly under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs (CEO) can designate a lower rate of customs duty for certain goods (s 269F). When an application is made for a TCO in respect of specific goods, the CEO must assess whether it meets the core criteria outlined in section 269C. This assessment is based on whether any substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C).
Entities subject to the Act must ensure that their applications are well-grounded and meet the criteria as defined by the Act. They must also be aware of the definitions provided under sections 269D, 269E, and 269F regarding the production of goods in Australia, the ordinary course of business, and substitutable goods. Failure to meet these criteria could result in the CEO denying the application. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might have reasons why the TCO should not be made, as per section 269K(1).
If the CEO is satisfied that the application meets the core criteria, they must issue a written TCO, as stipulated in section 269P(3). This order will specify that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995. For example, TCO No. 0619500 applies to certain gas cylinders, reducing the duty rate from 5% to 0%. Importantly, the TCO does not affect any pre-existing rights or impose any liabilities on individuals or entities except the Commonwealth (s 269S(1)). Importers can benefit from this by applying for duty refunds for goods imported since the TCO came into effect, as per paragraph 126(1)(r) of the Regulations.
In terms of enforcement and penalties, the Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to the TCO process itself. However, any general violations of the Customs Act or its regulations could result in penalties, which may include fines and imprisonment. The precise penalties would depend on the nature and severity of the breach under the broader provisions of the Act.