EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619605
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.
Inghams Enterprises Pty Ltd applied for a TCO in respect of certain stainless steel crate washers on 11 December 2006.
Instrument
TCO No 0619605 was made on 09 March 2007. It declares that those certain stainless steel crate washers 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. 0619605 is taken to have come into force on 11 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 was enacted by the Australian Parliament to establish a framework for the regulation of customs and excise duties. This Act aims to facilitate trade while ensuring revenue collection and protecting domestic industries. Specifically, it addresses the gap in the tariff system by allowing for tariff concession orders (TCOs) that can reduce customs duty rates on certain imported goods, provided specific criteria are met. The policy objective is to support industries by making imported goods more competitively priced, thereby encouraging local consumption and reducing costs for businesses reliant on these goods. The instrument in question, Tariff Concession Instrument No. 0619605, was introduced to provide a tariff concession for certain stainless steel crate washers, effectively reducing the duty rate from 5% to free, benefiting importers of these goods.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0619605, facilitates the application of tariff concessions to specific goods through Tariff Concession Orders (TCOs). This legislation applies to any person or entity that wishes to import goods that may benefit from reduced customs duty rates, provided that such goods do not fall under the category of goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The Act operates within the jurisdiction of the Commonwealth of Australia and applies to all goods imported into Australia, subject to the criteria outlined within the Act. The CEO of Customs has the authority to make a TCO if no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged, as specified by sections 269C and 269S of the Act. The Act's application may be extended or restricted through subordinate instruments, as appropriate. The commencement date of a TCO is the day on which the application is lodged, and it does not disadvantage any person or impose any new liabilities on anyone in respect of actions taken before the registration date.
Key Provisions
The key sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269SJ (sections 269C, 269F, 269P, 269SJ). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. If the CEO determines that the application meets the core criteria, which includes ensuring no substitutable goods were produced in Australia on the day the application was lodged (section 269C), a TCO is issued (section 269P). The CEO must make this decision based on the criteria outlined in section 269SJ, which specifies goods that cannot be subject to a TCO.
The Act imposes specific obligations on both the CEO and applicants for TCOs. For the CEO, the obligations include reviewing the application to ensure it meets the core criteria, consulting with the public by publishing a notice in the Gazette (subsection 269K(1)) and making a written order if the application is approved (subsection 269P(3)). For applicants, the obligation is to submit a valid application that provides sufficient evidence to demonstrate that the goods in question are not substitutable by any Australian-produced goods on the application date. This ensures that the concession applies only when necessary and appropriate.
Under the Customs Act 1901, there are no explicit offences, penalties, or consequences detailed for breaches of the TCO provisions. However, any misuse or improper application for a TCO could potentially lead to broader legal consequences under other sections of the Customs Act or related legislation, such as penalties for fraud or misrepresentation. The absence of specific penalties within the TCO framework suggests that the primary focus is on ensuring that tariff concessions are granted fairly and in accordance with the legislative criteria, rather than punitive measures for non-compliance.