EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707388
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.
Vestas Blades Australia Pty Ltd applied for a TCO in respect of certain fluid resin meters and mixers on 17 May 2007.
Instrument
TCO No 0707388 was made on 13 August 2007. It declares that those certain fluid resin meters and mixers 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 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. 0707388 is taken to have come into force on 17 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 Customs Act 1901, enacted by the Commonwealth Parliament, established a framework within which Tariff Concession Orders (TCOs) could be made by the Chief Executive Officer of Customs. The Tariff Concession Instrument No. 0707388, issued in 2007, addressed the gap in the Customs Act by providing a mechanism for reducing customs duty on certain goods. This legislative instrument aimed to support the policy objective of facilitating trade by reducing the cost of imported goods, thereby encouraging their use and availability in the Australian market. This particular instrument was introduced following an application by Vestas Blades Australia Pty Ltd for a concession on fluid resin meters and mixers, with the CEO of Customs determining that no substitutable goods were produced in Australia, thus meeting the core criteria for the concession. The instrument did not affect the rights of any person other than the Commonwealth and provided beneficial rights to importers, such as the ability to apply for a refund of duty on goods imported since the TCO was deemed to have come into force.
Scope and Application
The Customs Act 1901 applies to all individuals and entities involved in the importation and exportation of goods into and out of Australia. Specifically, Tariff Concession Orders (TCOs) under Part XVA of the Act can be applied for by any person seeking to reduce the customs duty on certain goods, provided the goods are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The scope of the Act extends to the entire Commonwealth of Australia, governing the importation of goods across all states and territories. The application of the Act is facilitated by the CEO of Customs, who has the authority to make TCOs if the core criteria, such as the absence of substitutable goods produced in Australia, are met. The application process includes public consultation, where interested parties can lodge submissions. The TCOs are effective from the date the application is lodged, and they do not disadvantage existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0707388 are outlined in sections 269C, 269F, and 269P of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the application is deemed valid and meets the core criteria as stipulated in section 269C, the CEO is mandated to make a written order (section 269P). This order effectively reduces the customs duty on specified goods, in this case, certain fluid resin meters and mixers, to zero.
The Act imposes several obligations on both the applicant and the CEO. For the applicant, the obligation is to submit a valid application to the CEO for a TCO. This application must demonstrate that the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO, on the other hand, must ensure that the application meets the core criteria, which include verifying that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). If the CEO is satisfied with the application, they must publish a notice in the Gazette inviting any objections and make the TCO as per section 269P.
Under the Customs Act 1901, failure to comply with the provisions of a TCO or providing false information in an application may lead to various consequences. However, the explanatory statement does not explicitly mention specific offences, penalties, or civil/criminal consequences for breach. Typically, breaches of customs regulations can result in financial penalties, seizure of goods, and in some cases, criminal charges. The exact penalties would depend on the nature and severity of the breach, but they could range from fines to imprisonment.
The Tariff Concession Instrument No. 0707388, which was made on 13 August 2007, declares that certain fluid resin meters and mixers are subject to a zero rate of duty. This concession came into effect on 17 May 2007, the date the application was lodged. It is important to note that the TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person except the Commonwealth. Importers of these goods can apply for a refund of duty on goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations.