EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712794
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.
Goodyear Belting Pty Ltd applied for a TCO in respect of certain pin barrel cold feed rubber compound extruders on 09 August 2007.
Instrument
TCO No 0712794 was made on 12 October 2007. It declares that those certain pin barrel cold feed rubber compound extruders 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. 0712794 is taken to have come into force on 09 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 Customs Act 1901 was enacted by the Australian Parliament to facilitate the administration of customs duties and to provide a framework for the regulation of imports and exports. The Act, particularly Part XVA, introduces a scheme allowing for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs (CEO). This mechanism aims to address the need for tariff reductions on specific goods, thereby promoting trade and economic efficiency. A TCO allows for a lower rate of customs duty on specified goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. This ensures that Australian industries are not unduly disadvantaged while still encouraging the import of necessary goods at a reduced cost. The policy objective behind the TCO scheme is to support Australian businesses by making essential imported goods more affordable and competitive. The Explanatory Statement for Tariff Concession Instrument No. 0712794, made under this Act, details the process by which the CEO assessed an application from Goodyear Belting Pty Ltd for a TCO on certain pin barrel cold feed rubber compound extruders, ultimately granting the concession and setting the duty rate at free, instead of the general rate of 5%.
Scope and Application
The Tariff Concession Instrument No. 0712794, under the Customs Act 1901, applies to individuals or entities seeking a tariff concession order (TCO) for specific goods imported into Australia. The Act enables the Chief Executive Officer (CEO) of Customs to grant lower customs duty rates on certain goods if the application meets the core criteria outlined in the legislation. The core criteria, as defined by section 269C of the Act, require that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This concession is applicable to the specific goods mentioned in the instrument, namely certain pin barrel cold feed rubber compound extruders. The instrument’s jurisdictional reach is Commonwealth, given its basis in the Customs Act 1901, which is a federal statute. The TCO does not impose any new liabilities or affect the rights of any person adversely in relation to actions taken before its registration. Instead, it offers potential benefits to importers by allowing them to apply for a refund of duty on goods imported since the TCO is deemed to have come into force. The application of this TCO can be further extended or clarified through subordinate instruments, although the primary legislation outlines the core conditions and application process.
Key Provisions
The main operative sections of the Customs Act 1901, particularly under Part XVA, allow for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These TCOs apply lower rates of customs duty to specified goods, provided that certain conditions are met. Section 269F allows for applications to be made by any person for a TCO. If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P). The core criteria, outlined in section 269C, include the requirement that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of "substitutable goods," "goods produced in Australia," and "ordinary course of business" are further detailed in sections 269D, 269E, and 269B respectively.
The obligations and requirements imposed by the Act on the parties it governs are primarily centred around the application process and the CEO's duty to assess and decide on the application. The CEO must ensure that the application is not in respect of goods specified in section 269SJ, which are ineligible for TCOs. If the CEO determines that the application meets the core criteria, they must make a TCO as per section 269P(3). Additionally, the CEO has an obligation to publish a notice in the Gazette inviting submissions on the application as soon as practicable after accepting it as a valid application (subsection 269K(1)). In the case of TCO No 0712794, the CEO did not receive any submissions in response to this invitation.
In terms of consequences for breach, the Act does not explicitly detail specific offences or penalties for failing to comply with the provisions of the TCO or the Act itself. However, the general legal framework within which the Customs Act operates implies that any non-compliance could potentially lead to civil or criminal proceedings. Such proceedings could result from breaches of customs regulations more broadly, which could include fines or imprisonment, depending on the severity of the offence. For instance, under the Crimes Act 1914, serious breaches of customs regulations could be subject to penalties including substantial fines and imprisonment for up to two years. However, specific penalties for non-compliance with TCOs are not outlined in the provided sections of the Customs Act 1901.