EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707143
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.
Zenon Australia Pty Ltd applied for a TCO in respect of certain filter modules on 7 May 2007.
Instrument
TCO No 0707143 was made on 20 July 2007. It declares that those certain filter modules 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. 0707143 is taken to have come into force on 7 May 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. 0707143, enacted under the Customs Act 1901, was introduced to provide a tariff concession for certain filter modules by reducing their customs duty rate from 5% to 0%. The Customs Act 1901 allows for Tariff Concession Orders (TCOs) to be issued by the Chief Executive Officer of Customs, which reduce the rate of customs duty on specified goods. Zenon Australia Pty Ltd applied for a TCO for these filter modules, which the CEO approved on 20 July 2007, based on the absence of substitutable goods produced in Australia. This legislative measure was designed to support importers by lowering the duty rate on these specific goods, thus enhancing their competitiveness and encouraging trade. The instrument became effective on the date of the application, 7 May 2007, and does not retroactively affect the rights or impose liabilities on anyone other than the Commonwealth.
Scope and Application
The Tariff Concession Order No. 0707143, issued under the Customs Act 1901, applies specifically to certain filter modules as requested by Zenom Australia Pty Ltd. The Act facilitates the granting of tariff concession orders by the Chief Executive Officer of Customs, which provide for reduced customs duties on specified goods, provided certain criteria are met. In this case, the CEO determined that no substitutable goods were produced in Australia, thereby satisfying the core criteria outlined in section 269C of the Act. The concession applies to the goods from the date the application was lodged, in this instance, 7 May 2007. The geographic reach of the Act is national, as it is a Commonwealth Act, and the TCO applies to the particular goods as defined in the instrument. There are no exclusions or exemptions noted in this specific TCO, and it does not affect any pre-existing rights or impose liabilities on anyone other than potentially benefiting importers by allowing them to apply for duty refunds under the Customs Act. The application of the Act may be extended or refined through subordinate instruments, although this specific TCO does not elaborate on such provisions.
Key Provisions
The primary sections of this legislation, specifically sections 269C, 269B, and 269P of the Customs Act 1901, establish the criteria for Tariff Concession Orders (TCOs) and the process by which they are granted. Section 269C stipulates that a TCO application is valid if no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', while Section 269P(3) mandates that the Chief Executive Officer of Customs (CEO) must issue a written order if the application meets the core criteria. The CEO is required to publish a notice in the Gazette under section 269K(1) to invite submissions regarding the TCO application, although in this case, no submissions were received.
The obligations imposed by this legislation are primarily on the CEO, who must assess the validity of TCO applications against the core criteria outlined in sections 269C and 269B. The CEO must also ensure that a public notice is published in the Gazette to allow for any objections to the TCO application. If no objections are received, the CEO must proceed to issue the TCO. On the other hand, the applicant, in this instance, Zenon Australia Pty Ltd, is required to submit a detailed application demonstrating that the conditions for a TCO are met. The applicant must provide evidence that no substitutable goods are produced in Australia and that the goods in question are eligible for a reduced tariff rate.
Failure to comply with the provisions of this Act could result in the CEO not issuing a TCO, which would mean that the applicant would not receive the tariff concessions they sought. There are no explicit offences or penalties outlined in the Act for failure to comply with the TCO application process, but non-compliance could lead to the application being rejected, thereby leaving the goods subject to the general tariff rates. The legislation does not specify criminal or civil penalties for breach but focuses on the procedural correctness of the application and the CEO's decision-making process.