EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705957
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.
Multivac Australia Pty Ltd applied for a TCO in respect of certain batch houses on 23 April 2007.
Instrument
TCO No 0705957 was made on 6 July 2007. It declares that those certain batch houses 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. 0705957 is taken to have come into force on 23 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the regulation of customs and excise duties, including the application of tariff concessions to certain goods. One notable aspect of this Act is the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that provide for lower rates of customs duty on specified goods. This mechanism was introduced to address the need for flexibility in tariff application, particularly to support industries where locally produced substitutes are not available, thereby encouraging trade and reducing costs for importers. The explanatory statement for Tariff Concession Instrument No. 0705957 outlines the process by which Multivac Australia Pty Ltd successfully applied for a TCO for certain batch houses, resulting in a duty reduction from 5% to 0%. This legislative instrument highlights the policy objective of facilitating trade by reducing the financial burden on importers of specific goods, provided no substitutable goods are produced domestically.
Scope and Application
The Customs Act 1901, as amended, provides a framework for the administration of customs duties in Australia, including the ability to grant tariff concession orders (TCOs) that lower the customs duty rates on certain goods. This Act applies to individuals and entities who import goods into Australia and are subject to customs duties. The scope of the Act extends to any goods imported into Australia, subject to the conditions specified in the Act and any subsequent TCOs. The application of the Act is not limited to any particular geographic area within Australia, thereby encompassing the entire Commonwealth. However, the Act excludes certain goods from being eligible for TCOs, as outlined in section 269SJ, which includes items such as alcoholic beverages, tobacco products, and certain types of firearms and explosives. The application of the Act can be further refined through subordinate instruments such as regulations, which may specify additional criteria or conditions under which TCOs can be granted or modified. The TCO No. 0705957, which was issued on 6 July 2007, is an example of such an instrument, as it specifies the particular goods eligible for the tariff concession and the conditions under which the concession applies.
Key Provisions
The Tariff Concession Instrument No. 0705957 is a regulation under the Customs Act 1901, which provides for the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). Specifically, this Instrument (section 269P(3)) declares that certain batch houses are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, with the general duty rate of 5% reduced to 0% under the TCO. The CEO must be satisfied that the application for a TCO meets the core criteria set out in section 269C, namely that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. In this case, the CEO determined that the batch houses applied for by Multivac Australia Pty Ltd qualified for the concession as no substitutable goods were produced in Australia.
The Act imposes certain obligations on the parties involved. For instance, any person can apply for a TCO if the goods in question are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO (section 269F). The CEO must then decide whether the application meets the core criteria. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). In the case of TCO No. 0705957, no submissions were received in response to the Gazette notice.
The Act also outlines potential consequences for non-compliance. While the explanatory statement does not explicitly state any offences or penalties for breach, it is understood that any failure to adhere to the provisions of the Customs Act 1901 or the Customs Tariff Act 1995 could result in civil or criminal penalties, as is typical with legislative breaches. The specific penalties would depend on the nature and severity of the breach, as well as any relevant case law or precedent. However, given that the explanatory statement focuses on the procedural aspects of the TCO application and does not mention any specific penalties, it is likely that the primary consequence of non-compliance would be the continuation of the standard duty rates on the goods in question.