EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720906
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.
GMCAT Pty Ltd applied for a TCO in respect of certain compressed air cylinders on 06 December 2007.
Instrument
TCO No 0720906 was made on 29 February 2008. It declares that those certain compressed air cylinders 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. 0720906 is taken to have come into force on 06 December 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 Parliament of Australia, was updated to address gaps in the tariff concession scheme by introducing the Tariff Concession Orders (TCO) mechanism. This allows the Chief Executive Officer of Customs to reduce the customs duty on certain imported goods if no substitutable goods are produced in Australia. This legislative update was intended to provide economic relief to businesses by lowering the cost of imported goods, thus encouraging trade and competition. The Tariff Concession Instrument No. 0720906, made under the authority of the Customs Act 1901, exemplifies this mechanism by granting a tariff concession to GMCAT Pty Ltd for certain compressed air cylinders, effectively setting their duty rate to free. This initiative aligns with the broader policy objective of supporting Australian businesses by mitigating the financial burden of customs duties on essential imported goods.
Scope and Application
The Tariff Concession Instrument No. 0720906 under the Customs Act 1901 applies to specific compressed air cylinders that were the subject of an application by GMCAT Pty Ltd. The Act facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce or eliminate customs duty on certain goods, provided they meet the criteria outlined in the Act, particularly that no substitutable goods are produced in Australia. This concession is limited to goods specified in the application and is effective from the date the application was lodged, in this case, 6 December 2007. The geographic reach of the Act is national, as it pertains to the importation of goods into Australia and the application of the Australian customs tariff. The TCO does not affect the rights of any person except the Commonwealth and does not impose any new liabilities on individuals or entities other than the Commonwealth. It is worth noting that the Act allows for the extension of its application through subordinate instruments, such as regulations, which may further define or refine the scope of the TCOs.
Key Provisions
The key operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 0720906, pertain to the establishment of Tariff Concession Orders (TCOs). Section 269F of the Act allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a TCO for specific goods. This section ensures that the application process is accessible to those seeking tariff concessions. Section 269C mandates that the CEO must determine if the application meets the core criteria, which requires that no substitutable goods were produced in Australia on the day the application was lodged. This is a critical provision for establishing eligibility for the tariff concession.
The obligations imposed on the parties by this Act are primarily on the CEO, who must ensure that applications for TCOs are processed according to the criteria set out in section 269C. The CEO must also ensure that no substitutable goods were produced in Australia on the date of the application, as defined by sections 269D and 269E. Additionally, under section 269K(1), the CEO has an obligation to publish a notice in the Gazette inviting submissions from any interested parties who might oppose the TCO. This ensures transparency and provides an opportunity for stakeholders to voice their concerns.
Failure to comply with the provisions of the Customs Act 1901, as amended by this Instrument, can lead to various consequences. Although the explanatory statement does not detail specific offences, breaches of the Act generally could result in civil or criminal penalties. The maximum penalties for breaches can vary widely depending on the nature and severity of the offence but could include fines and imprisonment. The exact penalties would be determined by the relevant sections of the Act and any applicable regulations. It is important to note that the absence of specific penalties in the explanatory statement does not imply that penalties do not exist; rather, it suggests that the penalties are not outlined within this particular document.