EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701477
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 applied for a TCO in respect of certain metal coating curers on 25 January 2007.
Instrument
TCO No 0701477 was made on 20 April 2007. It declares that those certain metal coating curers 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. 0701477 is taken to have come into force on 25 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 Parliament of Australia, establishes a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs). The Act was designed to facilitate trade by providing concessions on customs duties for certain goods, thereby addressing the economic and competitive needs of businesses. The Tariff Concession Instrument No. 0701477, made in 2007, is an example of this framework in action, providing specific tariff relief to particular goods. This instrument was introduced in response to an application by Visy Industries for a TCO concerning metal coating curers. The policy objective, as stated in the explanatory statement, is to ensure that if no substitutable goods are produced in Australia, a TCO can be granted, thereby reducing the customs duty on the specified goods and potentially benefiting importers by allowing them to apply for refunds of duties paid on those goods prior to the TCO's effective date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the creation of Tariff Concession Orders (TCOs) which can reduce the rate of customs duty on certain goods. This legislation applies to any person or entity seeking to import goods into Australia that are subject to a TCO. The geographic scope of this legislation is national, as it pertains to the importation of goods into Australia. The TCO process is initiated by an application to the Chief Executive Officer of Customs, who must determine if the application meets the core criteria set out in the Act. A key criterion is that no substitutable goods are being produced in Australia at the time of the application. If the CEO determines that the application meets these criteria, they issue a TCO, which specifies the lower rate of duty applicable to the goods. The TCO does not extend to goods listed in section 269SJ of the Act, which are ineligible for tariff concessions. Additionally, the Act allows for the application to be extended or restricted through subordinate instruments, although this specific instrument does not detail such extensions or restrictions.
Key Provisions
The main sections of the Customs Act 1901 that are relevant to Tariff Concession Orders (TCOs) include section 269C, which defines the core criteria that an application must meet for a TCO to be considered. This section requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269F allows an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. Section 269SJ specifies the goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods in question are subject to a lower rate of customs duty as specified in the relevant item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved include the requirement for the CEO to decide whether an application meets the core criteria, as defined by section 269C. If the CEO is satisfied that the application meets these criteria, they must issue a TCO. The CEO must also publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made, as stipulated in section 269K(1). Additionally, the CEO must ensure that the rights of importers are beneficially affected by the TCO, allowing them to apply for a refund of duty on goods imported since the TCO came into force, in accordance with the Customs (Admin) Regulations 1979.
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to TCOs. However, non-compliance with the terms of a TCO or failure to meet the requirements set out in the Act could potentially lead to administrative actions, such as the imposition of fines or other penalties, as per the general provisions of the Customs Act 1901 and associated regulations. The exact penalties would depend on the specific nature of the breach and the applicable laws at the time.