EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701142
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.
Signum Specialies Pty Ltd applied for a TCO in respect of certain pressure forming lines on 22 January 2007.
Instrument
TCO No 0701142 was made on 13 April 2007. It declares that those certain pressure forming lines 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. 0701142 is taken to have come into force on 22 January 2007.
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 Australian Parliament, establishes a framework for the administration of customs duties, including the possibility of tariff concession orders (TCOs) which reduce the duty on specific goods. The primary issue this legislation addresses is the facilitation of access to certain goods by reducing customs duty, provided no substitutable goods are produced in Australia. Tariff Concession Instrument No. 0701142, made under the authority of this Act, was introduced to provide a concession for certain pressure forming lines, setting their duty rate at 0% instead of the general rate of 5%. The policy objective underpinning this concession is to ensure that such goods are accessible and affordable, thereby benefiting importers who can apply for duty refunds for imports made since the effective date of the concession. The Chief Executive Officer of Customs is responsible for assessing and approving TCO applications, ensuring that the core criteria are met before granting any concessions.
Scope and Application
The Tariff Concession Instrument No. 0701142 under the Customs Act 1901 applies to entities or individuals who seek tariff concessions for specific goods entering Australia. This instrument is particularly relevant for importers who apply for lower rates of customs duty on goods that are not currently produced in Australia in the ordinary course of business. The scope of the Act is limited to goods that meet the core criteria set out in section 269C of the Customs Act, where the application for a tariff concession order (TCO) is considered if no substitutable goods are produced domestically. The instrument extends its application nationally across Australia and affects the importation process by reducing the duty on the specified goods from the general rate to zero percent, provided the application for the concession is valid and meets the statutory requirements. The Act does not impose any liabilities on persons other than the Commonwealth and does not disadvantage existing rights as it only applies prospectively from the date of the application. The instrument can be extended or restricted through subordinate instruments as outlined in the Customs Tariff Act 1995.
Key Provisions
The Customs Act 1901 includes provisions for the Chief Executive Officer (CEO) of Customs to make Tariff Concession Orders (TCOs) through which a lower rate of customs duty applies to certain goods (s 269F). Specifically, s 269C outlines the core criteria for a TCO application to be valid, requiring that no substitutable goods were produced in Australia at the time of application. A TCO is considered to have come into force on the day the application was lodged (s 269S(1)). This means that for TCO No. 0701142, the concessionary duty rate for certain pressure forming lines was effective from 22 January 2007.
Under this legislation, entities or individuals who wish to apply for a TCO must ensure their application adheres to the criteria outlined in s 269C. This involves demonstrating that no substitutable goods were produced in Australia in the ordinary course of business. The CEO is mandated to make a written order if the application meets these core criteria (s 269P(3)). Furthermore, the CEO must publish a notice in the Gazette inviting submissions from interested parties, although no submissions were received in relation to TCO No. 0701142 (s 269K(1)). The CEO's decision to grant the TCO is final, and the order applies to the goods specified, effective from the date the application was lodged.
Entities or individuals subject to the TCO must be aware of their rights and obligations under this legislation. Importers, in particular, can benefit from this concession by applying for a refund of duty on goods imported since the TCO came into effect (Regulation 126(1)(r)). It is crucial for these parties to understand that the TCO does not impose any liabilities on any person and does not affect their rights as at the date of registration (s 269S(1)).
In terms of consequences, the Customs Act 1901 includes provisions for breaches of its requirements. While the specific penalties are not detailed in the explanatory statement, it is reasonable to infer that non-compliance with the provisions regarding TCOs could lead to civil or criminal penalties. These may include fines or other penalties as prescribed by the Act. Given the nature of the concessions, any fraudulent application or misrepresentation of facts could also attract serious penalties, reflecting the seriousness with which the Act treats compliance with its provisions.