EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704051
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.
G James Australia Pty Ltd applied for a TCO in respect of certain continuous dryers on 16 March 2007.
Instrument
TCO No 0704051 was made on 8 June 2007. It declares that those certain continuous dryers 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. 0704051 is taken to have come into force on 16 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 Tariff Concession Instrument No. 0704051, enacted under the Customs Act 1901, addresses the need for tariff concessions on specific goods to facilitate trade and economic efficiency. This instrument was introduced to streamline the process by which businesses could apply for reduced customs duties on certain goods, provided they meet specific criteria such as the absence of substitutable goods produced in Australia. The Customs Act 1901 provides the framework for the Chief Executive Officer of Customs to make Tariff Concession Orders, which effectively lower the duty rates on eligible goods. The policy objective is to support Australian businesses by reducing their import costs, thereby potentially enhancing competitiveness and economic growth. This legislative measure ensures that businesses can apply for such concessions and, if approved, benefit from lower duty rates on specified goods, as seen in the case of the continuous dryers for which a zero per cent duty rate was applied.
Scope and Application
The Customs Act 1901 applies to the application for Tariff Concession Orders (TCO) as set out in Part XVA. The Act provides a mechanism for the Chief Executive Officer (CEO) of Customs to grant tariff concessions, thereby reducing the rate of customs duty for specific goods. These concessions are available to applicants, provided the goods in question are not specified in section 269SJ of the Act, which lists items ineligible for TCOs. The application process requires that, on the date of application, there are no substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. If the CEO is satisfied that the application meets these criteria, they must issue a TCO, which applies to the goods specified in the order. The TCO instrument has a national reach, operating within the Commonwealth of Australia, and the commencement date for TCOs is the day on which the application is lodged. The TCO in question, Instrument TCO No. 0704051, pertains to certain continuous dryers and came into force on 16 March 2007. The TCO does not affect existing rights or impose new liabilities on anyone other than the Commonwealth, and it provides for potential duty refunds for importers of the specified goods.
Key Provisions
The main operative sections of the Customs Act 1901, as modified by Tariff Concession Instrument No. 0704051, pertain to the process and criteria for making Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for certain goods. Once an application is deemed valid, the CEO must assess if the goods meet the core criteria outlined in sections 269C and 269P(3). If satisfied, the CEO must make a written order (TCO) declaring the goods to which the concession applies. In this instance, section 269P(3) confirms that the CEO must declare the continuous dryers as goods subject to a 0% duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes specific obligations on the CEO in the process of assessing and approving TCO applications. Under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not proceed. The CEO must also ensure that the application meets the core criteria, specifically that no substitutable goods are produced in Australia, as defined in sections 269D and 269E. If the application meets these criteria, the CEO must proceed to make the TCO, as mandated by section 269P(3).
Breaches of the provisions or requirements set out in the Customs Act 1901 may lead to various civil or criminal consequences. While the explanatory statement does not explicitly outline penalties for non-compliance with TCO regulations, general provisions within the Customs Act may apply. For example, section 228 of the Act pertains to penalties for providing false or misleading information in relation to customs and excise matters, which could attract fines or imprisonment depending on the severity of the offence. Additionally, section 232 outlines the penalties for evading customs duty, which include fines and imprisonment. These penalties underscore the importance of adhering to the statutory requirements for TCOs.