EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716686
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.
Umicore Marketing Services Australia Pty Ltd applied for a TCO in respect of certain automotive catalytic brick on 04 October 2007.
Instrument
TCO No 0716686 was made on 14 December 2007. It declares that those certain automotive catalytic brick 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. 0716686 is taken to have come into force on 04 October 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 for the imposition of customs duties on imported goods. It introduced Tariff Concession Orders (TCOs) as a mechanism to reduce or eliminate customs duties on specific goods under certain conditions, fostering trade and economic growth. The Tariff Concession Instrument No. 0716686, effective from 4 October 2007, was made under this Act to address the need for tariff concessions on automotive catalytic bricks. This instrument was enacted following an application by Umicore Marketing Services Australia Pty Ltd, aiming to ensure that these goods, which had no substitutable Australian-made equivalents, could be imported without incurring the general rate of duty, thus facilitating their availability and potentially lowering costs for businesses and consumers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be implemented by the Chief Executive Officer of Customs. These orders apply to particular goods, providing a reduced rate of customs duty for those subject to a TCO, effectively facilitating trade by making the importation of specified goods more economical. The Act applies to any person or entity that imports goods eligible for a TCO, and the scope of these goods is determined by the core criteria outlined in the Act, which must be satisfied for an application to be successful. Geographically, the application of the Act is national, as it pertains to the importation of goods into Australia, and its application is not restricted to specific states or territories. Any goods specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO, are excluded from the concessions provided by this legislation. The Act's application can be further extended or detailed through subordinate instruments, which may specify additional criteria or details regarding the implementation of TCOs.
Key Provisions
The primary operative sections of the Customs Act 1901, as related to Tariff Concession Orders (TCOs), include sections 269C, 269B, 269D, 269E, 269F, and 269P(3) (subsections 269K(1) and 269S(1) also play a role in the process). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO for goods, provided the goods do not fall under the exceptions specified in section 269SJ. The CEO then assesses whether the application meets the core criteria outlined in sections 269C and 269B, which pertain to the production of substitutable goods in Australia and the meaning of terms like "ordinary course of business" and "substitutable goods." If the CEO determines that the application satisfies these criteria, they must issue a written order (a TCO) as per section 269P(3), which specifies the applicable customs duty rate for the goods in question.
The Customs Act imposes several obligations and requirements on the parties involved in the TCO process. Firstly, applicants must ensure that their goods are eligible for a TCO by confirming that no substitutable goods are produced in Australia. They must submit a valid application to the CEO, who must then publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not proceed (subsection 269K(1)). The CEO is also responsible for assessing the application against the core criteria and making a decision in a timely manner. The Act ensures that the TCO does not retroactively affect the rights of any person other than the Commonwealth, and it allows for the possibility of duty refunds for importers under paragraph 126(1)(r) of the Regulations.
The Act does not specify any direct offences or penalties for breaches related to the issuance or application of a TCO. However, the consequences of non-compliance can include the imposition of the general rate of duty on goods if the criteria for a TCO are not met or if the TCO process is not followed correctly. The potential financial implications for importers or businesses who do not benefit from a TCO due to non-compliance can be significant. Additionally, while the Act does not detail specific penalties, general legal consequences may apply for actions that contravene the provisions of the Customs Act or related regulations.
In summary, the Customs Act 1901 facilitates the issuance of TCOs through a structured process that includes application, assessment by the CEO, and publication in the Gazette. The Act sets out clear criteria for determining eligibility for a TCO and ensures that the rights of importers are protected. Although specific penalties for breaches are not detailed, the Act's provisions aim to maintain the integrity of the customs duty system by ensuring that TCOs are granted only when appropriate.