EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619684
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.
Visy Industries Australia Pty Ltd applied for a TCO in respect of certain inside can sprayers on 12 December 2006.
Instrument
TCO No 0619684 was made on 09 March 2007. It declares that those certain inside can sprayers 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. 0619684 is taken to have come into force on 12 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, facilitates the reduction of customs duty on certain goods through the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation was introduced to address the need for a flexible tariff system that can respond to specific economic circumstances, particularly where Australian-produced substitutes are not available, thereby encouraging the importation of goods that are not domestically produced. The Tariff Concession Instrument No. 0619684, made on 09 March 2007, is an example of such a measure, applying to certain inside can sprayers by setting their duty rate to zero. The policy objective is to support industries by reducing costs and enhancing competitiveness, without imposing any liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Customs Act 1901, through Part XVA, governs the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply to specific goods, providing a lower rate of customs duty if certain criteria are met. A TCO can be applied for by any person, provided the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for TCOs. The CEO evaluates whether the application meets the core criteria set out in section 269C, primarily that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are satisfied, a TCO is issued, effectively lowering the duty rate for the specified goods as outlined in Schedule 4 to the Customs Tariff Act 1995. The TCO does not retroactively affect any rights or impose liabilities on individuals other than the Commonwealth, though it does benefit importers by potentially allowing duty refunds for goods imported since the TCO's effective date.
Key Provisions
The Customs Act 1901 includes provisions for Tariff Concession Orders (TCOs) under Part XVA. These orders allow for a lower rate of customs duty on certain goods. An application for a TCO can be submitted to the Chief Executive Officer (CEO) of Customs (section 269F). The CEO must then determine if the application meets the core criteria set out in section 269C of the Act, which generally requires that no substitutable goods are produced in Australia on the date the application is lodged. If the CEO is satisfied that the application meets these criteria, they must issue a written TCO (section 269P(3)). This was the case for TCO No. 0619684, which was issued for certain inside can sprayers on 9 March 2007, after Visy Industries Australia Pty Ltd applied on 12 December 2006.
The Act imposes several obligations on the CEO and applicants. The CEO must ensure that the application is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. The CEO must also publish a notice in the Gazette inviting any objections to the TCO (subsection 269K(1)). In this case, no submissions were received. Additionally, the TCO must be issued on the date the application was lodged (subsection 269S(1)), ensuring that the concession applies retroactively from that date.
Any breach of the provisions regarding TCOs can lead to civil and criminal consequences. The exact nature of these consequences is not detailed in the explanatory statement, but they typically include penalties for non-compliance with the Act's requirements or for submitting false information in an application. The maximum penalties would depend on the specific nature of the breach and are not specified here. The Act ensures that the rights of importers are protected and that no one other than the Commonwealth is disadvantaged or imposed liabilities as a result of the TCO.