EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702059
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.
Copperco Limited applied for a TCO in respect of a certain copper processing plant on 13 February 2007.
Instrument
TCO No 0702059 was made on 11 May 2007. It declares that those certain copper processing plants 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. 0702059 is taken to have come into force on 13 February 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 Tariff Concession Instrument No. 0702059, enacted in 2007 under the Customs Act 1901, addresses the need for tariff concessions on specific goods, ensuring they receive lower rates of customs duty. This instrument was introduced to provide relief to importers by reducing the customs duty on certain goods, thereby addressing economic inefficiencies and promoting fair competition within the market. The Tariff Concession Orders (TCOs) are made by the Chief Executive Officer of Customs and apply to goods for which no substitutable goods are produced in Australia in the ordinary course of business. The policy objective is to facilitate the importation of goods that are not locally produced, ensuring they are competitively priced and accessible to Australian businesses and consumers.
The instrument was enacted by the relevant legislature, with the Tariff Concession Order No. 0702059 specifically applied to certain copper processing plants, as applied for by Copperco Limited. This order was made on 11 May 2007, effective from the date the application was lodged, 13 February 2007. The process involved publishing a notice in the Gazette to invite submissions, which in this case, did not receive any. The enactment of this TCO aims to benefit importers by potentially allowing them to apply for a refund of duty on the specified goods imported since the effective date of the order.
Scope and Application
The Tariff Concession Instrument No. 0702059 under the Customs Act 1901 applies specifically to goods that are the subject of a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. This Act facilitates the application process for entities seeking tariff concessions for certain goods, ensuring that if the application criteria are met, a lower rate of customs duty is applied. The application process requires that the goods in question are not specified in section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO. Additionally, the core criteria for approval, as stipulated in section 269C, necessitates that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This Act applies across the Commonwealth of Australia and operates to benefit importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, as outlined in the Customs Tariff Act 1995. The Act does not affect the rights of any person other than the Commonwealth or impose liabilities on any person for actions taken prior to the registration of the TCO.
Key Provisions
The Customs Act 1901 (the Act) provides for the creation of Tariff Concession Orders (TCOs) under section 269F, which apply a reduced rate of customs duty to specified goods. The process begins when a person applies to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods (section 269F). The CEO must consider whether the goods are eligible, which involves checking if the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria set out in section 269C, they must make a written TCO. This process is governed by section 269P(3), which mandates the CEO to declare that the goods are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, resulting in a tariff concession.
The obligations imposed on the parties governed by the Act include the requirement for applicants to ensure their applications meet the core criteria, which involves demonstrating that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The CEO must also ensure that they publish a notice in the Gazette inviting submissions if they accept a TCO application as valid (subsection 269K(1)). The CEO in this case did not receive any submissions against the application made by Copperco Limited for a TCO in respect of a certain copper processing plant. Additionally, the CEO must ensure that the TCO does not adversely affect the rights of any person as at the date of registration (subsection 269S(1)).
There are no specific offences, penalties, or consequences mentioned for breach of the provisions in the Customs Act 1901 as they relate to the issuance of TCOs. However, general provisions in the Act may apply to breaches of customs laws, including the imposition of fines and imprisonment. The maximum penalties for breaches of customs laws can include fines of up to $11,100 and imprisonment for up to 2 years, as outlined in section 241 of the Act. For more severe breaches, the penalties can increase significantly, with fines potentially reaching up to $222,000 and imprisonment for up to 10 years.