EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703293
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.
GMCAT Pty Ltd applied for a TCO in respect of certain band saws on 01 March 2007.
Instrument
TCO No 0703293 was made on 25 May 2007. It declares that those certain band saws 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. 0703293 is taken to have come into force on 01 March 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 Commonwealth Parliament, provides a framework for the regulation of customs and excise in Australia. Specifically, Part XVA of this Act allows for the creation of Tariff Concession Orders (TCOs) which can reduce the rate of customs duty on certain goods. The problem or gap that this legislation addresses is the need to provide relief from customs duties on goods where there is no domestic production, thereby supporting import-dependent industries and promoting competitive pricing. The Tariff Concession Instrument No. 0703293, made on 25 May 2007, exemplifies this mechanism by granting a tariff concession on certain band saws, reducing their duty from 5% to free, effective from 1 March 2007, the date the application was lodged. The policy objective, as stated in the explanatory statement, is to ensure that the application of tariff concessions does not disadvantage any person and allows for potential duty refunds for importers of the affected goods.
Scope and Application
The Tariff Concession Instrument No. 0703293, made under the Customs Act 1901, applies to entities or individuals who seek tariff concessions for specific goods, in this case, certain band saws. This Instrument was issued by the Chief Executive Officer of Customs following an application by GMCAT Pty Ltd on 1 March 2007. The instrument grants a tariff concession order (TCO) to the specified band saws, thereby applying a zero percent duty rate on these goods, as opposed to the general rate of 5% as outlined in the Customs Tariff Act 1995. This concession is contingent upon the CEO’s determination that no substitutable goods are produced in Australia. The geographic reach of this Act is national, impacting all entities within Australia involved in the importation of these band saws. The instrument's scope does not extend to goods specified in section 269SJ of the Customs Act 1901, which are ineligible for a TCO. The commencement of this TCO is retroactive to the date of the application, 1 March 2007, and does not disadvantage or impose liabilities on any person other than the Commonwealth for actions taken prior to the date of registration. This legislative measure ensures that the rights of importers are positively affected, allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901, as explained in the Explanatory Statement, include sections 269C, 269F, 269P(3), 269K(1), and 269S(1). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria specified in section 269C, and the goods are not specified in section 269SJ, the CEO must make a TCO as per section 269P(3). This order declares that the goods are subject to a prescribed rate of duty. Section 269K(1) mandates the CEO to publish a notice in the Gazette inviting submissions on the application, while section 269S(1) states that a TCO comes into force on the day the application is lodged.
The obligations imposed by the Act on the parties include the requirement for the CEO to assess whether the TCO application meets the core criteria, specifically if no substitutable goods were produced in Australia at the time of application. The CEO must also ensure that the goods in question are not prohibited from being subject to a TCO under section 269SJ. Additionally, the CEO is obligated to publish a notice in the Gazette, inviting submissions from any interested parties who may have reasons to oppose the TCO, as stipulated in section 269K(1). The Act further mandates that the TCO should not disadvantage any person, other than the Commonwealth, or impose liabilities for actions taken prior to the TCO's registration date.
The explanatory statement does not explicitly detail offences, penalties, or consequences for breaches of the Act. However, it is reasonable to infer that any failure to comply with the provisions for TCO applications, such as providing incorrect information or not adhering to the specified criteria, could potentially result in legal repercussions. The exact nature of these consequences would depend on the specific breaches and could include administrative penalties, fines, or other enforcement actions as prescribed by the relevant laws and regulations. The absence of specific penalties in the explanatory statement does not diminish the potential seriousness of non-compliance with the legislative requirements.