EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712696
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.
Metals Finance Pty Ltd applied for a TCO in respect of certain ion exchange parts on 9 August 2007.
Instrument
TCO No 0712696 was made on 19 October 2007. It declares that those certain ion exchange 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. 0712696 is taken to have come into force on 9 August 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. 0712696, made under the Customs Act 1901, was enacted in 2007 to address the specific need for tariff concessions on certain imported goods. This legislation facilitates the reduction of customs duties for specific goods, in this case certain ion exchange parts, by allowing the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) if certain criteria are met. The key objective is to ensure that no substitutable goods are produced in Australia, thereby supporting the importation of these specific goods at a reduced duty rate. The enactment of this instrument by the CEO was in response to an application from Metals Finance Pty Ltd, and no objections were raised during the consultation period. The TCO came into effect on the date the application was lodged, providing immediate benefits to importers by potentially allowing them to apply for a refund of duty on imported goods since the effective date of the TCO.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This instrument applies to individuals and entities seeking a reduction in customs duty on specific goods by applying for a TCO. Such applications must meet the core criteria outlined in sections 269C and 269SJ of the Act, which pertain to the absence of substitutable goods produced in Australia in the ordinary course of business and the ineligibility of certain goods, respectively. The geographic reach of this legislation is national, applying across all states and territories of Australia. The application of TCO No. 0712696, effective from 9 August 2007, grants a 0% duty rate on certain ion exchange parts, which contrasts with the general rate of 5%. This concession does not disadvantage existing parties nor impose new liabilities on them. Any person, including importers, can benefit from this concession by applying for a duty refund as per the Regulations. The scope and application of this legislation are further extended or restricted through subordinate instruments, which provide detailed definitions and operational guidelines.
Key Provisions
The main operative sections of this legislation are sections 269C, 269P(3), and 269S(1) of the Customs Act 1901. Section 269C stipulates that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, they must issue a written order (a TCO). Finally, section 269S(1) provides that a TCO is deemed to come into force on the day the application for the TCO was lodged.
The obligations imposed on the parties governed by this Act include the requirement for the CEO to assess whether a TCO application meets the core criteria as outlined in section 269C. Once an application is accepted as valid, the CEO must publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to submit their concerns (subsection 269K(1)). Additionally, section 269S(1) ensures that a TCO is effective from the date the application was lodged, without affecting any existing rights or imposing new liabilities prior to that date.
In terms of potential breaches, there are no specific offences outlined in the explanatory statement. However, the failure to comply with the notification and assessment processes could result in the TCO not being issued, potentially impacting the applicant's customs duty benefits. The consequences for not adhering to the procedural requirements could include the rejection of the TCO application or the inability to benefit from the tariff concession.
Civil and criminal penalties are not explicitly mentioned in the explanatory statement. However, any breaches of the notification or assessment process could lead to administrative actions or challenges in the courts. It is important to note that while there are no specific penalties stated, the non-compliance with the legislative requirements might result in the loss of the tariff concession benefits for the applicant.