EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704674
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.
Larox Pty Ltd applied for a TCO in respect of certain ceramic filter parts on 27 March 2007.
Instrument
TCO No 0704674 was made on 15 June 2007. It declares that those certain ceramic filter parts 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 10%. 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. 0704674 is taken to have come into force on 27 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 Australian Parliament, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This piece of legislation was introduced to address the need for tariff concessions to facilitate trade by reducing customs duties on specific goods. Instrument No. 0704674, issued under the Customs Act, represents an application of this framework. Larox Pty Ltd applied for a TCO concerning certain ceramic filter parts, and following a determination by the CEO that no substitutable goods were produced in Australia, the CEO issued TCO No. 0704674 on 15 June 2007. This order effectively reduced the duty rate on these ceramic filter parts from the general rate of 10% to free, effective from the date the application was lodged, 27 March 2007. The policy objective, as outlined in the explanatory statement, is to ensure that such tariff concessions do not disadvantage any person or impose new liabilities, while potentially benefiting importers by allowing them to apply for duty refunds on imports made since the TCO's effective date.
Scope and Application
The Customs Act 1901, through its Tariff Concession Instrument No. 0704674, applies to individuals or entities seeking tariff concessions for specific goods entering Australia, with the scope limited to those goods that are not explicitly excluded by section 269SJ of the Act. The instrument, issued by the Chief Executive Officer of Customs (CEO), pertains to the application of a lower rate of customs duty on the specified goods, contingent on the determination that no substitutable goods were produced in Australia at the time of application. The instrument's jurisdictional reach is national, affecting all importers within Australia. There are no exclusions or exemptions specified in the instrument itself, although section 269SJ outlines goods that cannot be subject to a TCO. The instrument also allows for the possibility of subordinate instruments to further define terms such as 'substitutable goods' and 'ordinary course of business', thereby extending or restricting the application as necessary.
Key Provisions
The main operative sections of the Customs Act 1901, particularly as they relate to Tariff Concession Orders (TCOs), include section 269F, which allows for the application of a TCO for goods; section 269C, which sets out the core criteria for a TCO application; and section 269P(3), which requires the Chief Executive Officer of Customs (CEO) to make a written order if the application meets the core criteria. Section 269SJ details goods that cannot be subject to a TCO. The explanatory statement outlines that a TCO was made in respect of certain ceramic filter parts, resulting in a concessional rate of duty for these goods.
The Act imposes several obligations on the parties involved. Firstly, it mandates that the CEO must determine whether a TCO application meets the core criteria as outlined in section 269C. This involves ensuring that no substitutable goods were produced in Australia on the day the application was lodged, as defined in sections 269D and 269E. The CEO must also ensure that the goods in question do not fall under the prohibited list in section 269SJ. Furthermore, the CEO is required to publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made, as stipulated in section 269K(1). In this instance, no submissions were received.
In terms of offences, penalties, or consequences, the Act does not explicitly state any civil or criminal penalties for breaches related to TCOs. However, failure to comply with the Act’s requirements could potentially lead to legal actions or administrative penalties. The explanatory statement does not specify any maximum penalties for breaches, but such actions would likely be addressed under the general provisions of the Customs Act 1901 or other related legislation. The statement does clarify that the TCO does not affect the rights of any person or impose liabilities in respect of actions taken before the TCO was registered, ensuring that the rights of importers are beneficially affected and that they can apply for a refund of duty on goods imported since the TCO came into force.