EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705006
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.
Pebblecrete Insitu Pty Ltd applied for a TCO in respect of certain tile presses on 2 April 2007.
Instrument
TCO No 0705006 was made on 22 June 2007. It declares that those certain tile presses 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. 0705006 is taken to have come into force on 2 April 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. 0705006, made under the Customs Act 1901, was enacted to address a gap in tariff concession applications for specific imported goods, ensuring that tariff concessions are applied appropriately and fairly. This legislation was introduced to facilitate tariff concessions for goods where no suitable Australian-produced substitutes exist, thereby promoting fair trade practices and potentially benefiting importers by reducing the duty rates on certain goods. The enacting body responsible for this legislative instrument is the Chief Executive Officer of Customs, who is mandated to assess and decide on tariff concession orders based on the criteria specified in the Customs Act. The primary policy objective of this instrument is to provide a streamlined process for tariff concession applications, ensuring that the concession is granted only when it aligns with the legislative intent of fostering competitive and fair trade practices in Australia.
Scope and Application
The Tariff Concession Instrument No. 0705006 under the Customs Act 1901 applies to Pebblecrete Insitu Pty Ltd in respect of certain tile presses. The application of the Instrument is contingent on the Chief Executive Officer of Customs determining that no substitutable goods were produced in Australia on the day the application was lodged, and that the application meets the core criteria outlined in the Act. The geographic and jurisdictional reach of this Act is national, as it pertains to customs duties within Australia. The Instrument reduces the duty rate from the general rate of 5% to 0% for the specified tile presses, thereby benefiting the importers of these goods. The Instrument does not impose any liabilities on any person and does not affect the rights of any person as at the date of registration, except to potentially benefit importers by allowing them to apply for a refund of duty on goods imported since the date the TCO is taken to have come into force. The application of the Act can be extended or restricted through subordinate instruments, as outlined in the Customs Act 1901.
Key Provisions
The main operative sections of this legislation are sections 269C, 269B, 269E, 269P(3), and 269SJ of the Customs Act 1901 (the Act) which define the criteria for a Tariff Concession Order (TCO). Section 269C states that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines the terms 'goods produced in Australia', 'ordinary course of business' and 'substitutable goods'. Section 269E clarifies what is meant by 'ordinary course of business'. Section 269P(3) outlines that if the Chief Executive Officer of Customs (the CEO) is satisfied that a TCO application meets the core criteria, a written order must be made declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269SJ lists the goods that cannot be subject to a TCO.
The Act imposes several obligations and requirements on the parties it governs. Firstly, any person seeking a TCO must ensure their application meets the core criteria outlined in section 269C of the Act. This involves demonstrating that no substitutable goods were produced in Australia on the day the application was lodged. The CEO must then assess the application against these criteria and determine if it meets the core criteria. If satisfied, the CEO must make a written TCO as per section 269P(3). The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, in accordance with subsection 269K(1) of the Act. Any TCO made under this legislation does not affect the rights of a person as at the date of registration so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration.
There are no specific offences, penalties, or civil/criminal consequences outlined for breach of this legislation. However, failure to meet the core criteria for a TCO application, as defined in section 269C of the Act, would result in the CEO not being able to make a TCO. Additionally, any person who provides false or misleading information in a TCO application could potentially be subject to civil or criminal penalties under other relevant laws, though these are not specified in this legislation. The focus of the Act is on facilitating tariff concessions for certain goods, rather than penalising non-compliance.
Overall, the key requirements of this legislation revolve around the process for making TCOs and the criteria that must be met for a TCO to be granted. The CEO plays a central role in assessing TCO applications and making written TCOs where appropriate. The rights of importers are protected, while the rights of other persons are not adversely affected by a TCO. There are no specific penalties outlined for breach, though failure to meet the core criteria would prevent a TCO from being made.