EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0800533
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.
Australian Urethane & Styrene Pty Ltd applied for a TCO in respect of certain moulding machines on 9 January 2008.
Instrument
TCO No 0800533 was made on 25 March 2008. It declares that those certain moulding machines 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. 0800533 is taken to have come into force on 9 January 2008.
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, establishes a framework for the administration of customs and excise duties. It was introduced to address the need for a structured approach to the management of customs duties and tariff concessions. The Act provides for the creation of Tariff Concession Orders (TCOs) under section 269F, which allow for reduced customs duties on specified goods. This mechanism is particularly relevant when it is determined that no substitutable goods are produced in Australia, as stipulated in section 269C. The policy objective of these concessions is to promote economic efficiency and competitiveness by reducing the cost of imported goods, thereby benefiting consumers and businesses. The Explanatory Statement for Tariff Concession Instrument No. 0800533, issued under this Act, highlights the application process and the decision-making criteria for granting tariff concessions, ensuring transparency and adherence to legislative requirements.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the process through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (the CEO). This legislation applies to individuals or entities that seek to reduce the customs duty on imported goods by applying for a TCO. The scope of the Act encompasses the review of applications and the issuance of orders that apply a reduced or free rate of duty on specified goods, provided that the application meets the core criteria outlined in the Act, such as the absence of substitutable goods produced in Australia. The geographic reach of the Act is national, with the application and effect of TCOs being felt across Australia. While the Act broadly applies to any person or entity, it excludes certain goods specified in section 269SJ from being subject to a TCO. The Act also allows for the extension or restriction of its application through subordinate instruments, such as regulations or orders, which can further define terms and criteria for specific cases. The commencement of a TCO is effective from the date the application is lodged, ensuring that the benefits of tariff concessions are promptly realised for qualifying imports.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0800533 under the Customs Act 1901, require the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) when satisfied that certain conditions are met. Section 269F allows for an application to be made for a TCO in respect of goods, while section 269C stipulates that the application meets core criteria if no substitutable goods were produced in Australia on the day the application was lodged (subsection 269P(3)). If these criteria are satisfied, the CEO must issue a written order (section 269P(3)). For the specific case of Australian Urethane & Styrene Pty Ltd, TCO No. 0800533 declares that certain moulding machines are subject to a 5% general rate of duty but are free of duty under the TCO (Schedule 4, item 50). This TCO came into force on 9 January 2008, the date the application was lodged (subsection 269S(1)).
The obligations imposed by the Act on parties and entities governed by it include the requirement for the CEO to evaluate TCO applications against the criteria set out in the Act. The CEO must also ensure that any substitutable goods produced in Australia are considered before making a decision. Additionally, the CEO is obligated to publish a notice in the Gazette, inviting submissions from any interested parties who believe there are reasons why the TCO should not be made (subsection 269K(1)). In this instance, no submissions were received. The Act further requires that the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration, ensuring that no existing liabilities or disadvantages are imposed by the TCO on non-Commonwealth parties.
Offences, penalties, or civil/criminal consequences for breach of this Act are not explicitly detailed within the provided text. However, the nature of the Act suggests that failure to comply with the stipulated procedures for applying for and issuing a TCO could potentially lead to legal challenges or administrative penalties. Given that the Act focuses on facilitating tariff concessions and does not explicitly outline penalties, any breaches would likely be addressed through administrative review or judicial interpretation rather than specific penalties stated within the text. The Act ensures that the rights of importers are positively affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).