EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716849
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.
Oxiana Golden Grove Pty Ltd applied for a TCO in respect of certain parts filters on 4 October 2007.
Instrument
TCO No 0716849 was made on 21 December 2007. It declares that those certain parts filters 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. 0716849 is taken to have come into force on 4 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 was enacted by the Australian Parliament to provide a framework for the administration of customs and excise duties and other import and export controls. This Act established a mechanism through which the Chief Executive Officer of Customs could issue Tariff Concession Orders (TCOs) that provide lower rates of customs duty on specified goods. The problem this legislation addresses is the facilitation of trade by reducing the cost burden on imported goods, thereby promoting economic efficiency and competitiveness for businesses that rely on importing specific parts or components not produced domestically. The policy objective, as stated in the explanatory statement, is to ensure that tariff concessions are granted where no substitutable goods are produced in Australia, thus encouraging trade without disadvantaging domestic producers. The Tariff Concession Instrument No. 0716849, issued under this Act, exemplifies the application of these principles by granting a zero-percent duty rate on certain parts filters, which aligns with the overarching goal of fostering a balanced and competitive trade environment.
Scope and Application
The Customs Act 1901, as amended, includes provisions under Part XVA that allow for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs. These orders apply to specific goods and reduce the rate of customs duty on those goods. An application for a TCO can be made by any person, provided the goods in question are not those specified in section 269SJ of the Act that are ineligible for a concession. The core criteria for approving a TCO, as outlined in section 269C, require that no substitutable goods were produced in Australia on the day the application was lodged, with "substitutable goods" defined in section 269D. If the CEO determines that the application meets these criteria, they are mandated to issue a written order, a TCO, specifying that the goods in question are subject to a particular item in Schedule 4 to the Customs Tariff Act 1995, thereby reducing the duty rate. The TCO does not extend to affecting the rights of any person other than the Commonwealth in relation to actions taken prior to the order's registration.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0716849 are sections 269C, 269F, and 269P of the Customs Act 1901. Section 269C outlines the core criteria that must be met for a Tariff Concession Order (TCO) to be issued, requiring that no substitutable goods were produced in Australia at the time the application was lodged. Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, and Section 269P stipulates that if the CEO is satisfied that the application meets the core criteria, they must make a written order declaring the goods subject to the TCO. The specific TCO No. 0716849 declares that certain parts filters are subject to a zero percent duty rate as they meet the core criteria and no substitutable goods were produced in Australia at the time of application.
The Act imposes certain obligations on the parties involved, primarily focusing on the CEO of Customs. The CEO must ensure that any application for a TCO is not in respect of goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO. Upon accepting a valid TCO application, the CEO must publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not be made. In the case of TCO No. 0716849, no submissions were received. Additionally, the CEO must ensure that the TCO does not affect the rights of any person, other than the Commonwealth, in a manner that would disadvantage them or impose liabilities for actions taken prior to the TCO's registration.
Under the Customs Act 1901, breaches or non-compliance with the provisions governing Tariff Concession Orders can lead to various consequences. Although specific offences and penalties are not detailed in the explanatory statement, breaches of the Act can result in both civil and criminal penalties. Civil penalties may include fines or financial penalties, while criminal penalties can result in imprisonment. The exact penalties depend on the nature and severity of the breach, with the maximum penalties outlined in relevant sections of the Customs Act and associated regulations. The Act ensures that any person found in breach of its provisions is subject to these penalties, maintaining the integrity and enforcement of the tariff concession scheme.