EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707566
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.
H T Engineering Pty Ltd applied for a TCO in respect of certain boiler circulating pump parts on 22 May 2007.
Instrument
TCO No 0707566 was made on 27 July 2007. It declares that those certain boiler circulating pump 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 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. 0707566 is taken to have come into force on 22 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. 0707566, enacted in 2007, is an instrument under the Customs Act 1901. This Act was enacted by the Australian Parliament and provides a framework for the administration of customs and excise duties. The Instrument addresses the need for tariff concessions on specific goods by allowing for a lower rate of customs duty under certain conditions. The problem it addresses is the potential economic disadvantage faced by importers of goods that are not produced domestically, by providing a mechanism for tariff reductions on such goods when they are imported. The policy objective of the Instrument is to facilitate the importation of goods that are not produced in Australia, thereby promoting trade and potentially lowering costs for businesses and consumers. The Instrument was developed following an application by H T Engineering Pty Ltd for tariff concessions on certain boiler circulating pump parts, which was approved by the Chief Executive Officer of Customs after a determination that no substitutable goods were produced in Australia.
Scope and Application
The Customs Act 1901, under Part XVA, establishes a framework for Tariff Concession Orders (TCO) which can be issued by the Chief Executive Officer of Customs. These orders apply to goods for which a lower rate of customs duty is applicable. Any person may apply to the CEO for a TCO in respect of goods, provided that the goods are not specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. The CEO must determine if the application meets the core criteria, specifically whether no substitutable goods were produced in Australia in the ordinary course of business at the time of application. If the application meets these criteria, a TCO is issued, declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby reducing the duty rate. The Act also mandates the CEO to publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made, although no such submissions were received in this case. The TCO's commencement date aligns with the date the application was lodged, ensuring that any rights of the Commonwealth are not adversely affected. Importers, however, stand to benefit from potential duty refunds on goods imported since the TCO's effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0707566, as part of the Customs Act 1901, establish the process by which Tariff Concession Orders (TCOs) can be made. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, the CEO must then make a written order (section 269P(3)). The instrument specifies that certain boiler circulating pump parts are subject to a TCO, which applies a zero percent duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by this legislation primarily concern the CEO of Customs. Once an application is received, the CEO must first determine if it pertains to goods specified in section 269SJ of the Act, which are ineligible for a TCO. If the application is valid, the CEO must ensure that no substitutable goods were produced in Australia on the day the application was lodged, as stipulated by section 269C. If these conditions are met, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections, as required by subsection 269K(1). If no objections are received, the CEO is obligated to proceed with making the TCO. The instrument also mandates that the TCO must come into force on the day the application was lodged, as per subsection 269S(1).
Breaches of the provisions outlined in the Customs Act 1901, including those relating to Tariff Concession Orders, could result in various penalties. While specific offences and penalties are not detailed in the explanatory statement, general contraventions of the Customs Act can lead to both civil and criminal penalties. Civil penalties may include fines, and in severe cases, criminal penalties could apply, leading to imprisonment. The exact penalties would depend on the nature and severity of the breach, and would be subject to the general provisions of the Customs Act.