EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803928
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.
Orica Australia Pty Ltd applied for a TCO in respect of certain powder coating milling system on 11 March 2008.
Instrument
TCO No 0803928 was made on 06 June 2008. It declares that those certain powder coating milling systems 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. 0803928 is taken to have come into force on 11 March 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 Australian Parliament, outlines a framework for the imposition of customs duties on imported goods. This Act was introduced to regulate and facilitate international trade by setting a structured approach to the application and collection of customs duties. Among its provisions, the Customs Act 1901 includes the authority for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs), which can reduce or eliminate customs duties on specific goods under certain conditions. This mechanism was designed to address the need for tariff concessions that support industries by reducing the cost of imported goods, thereby fostering competitiveness and economic growth. The Explanatory Statement for Tariff Concession Instrument No. 0803928, issued under the Customs Act, exemplifies the application of this framework to provide duty-free treatment for certain powder coating milling systems, reflecting the policy objective of supporting specific industrial sectors by lowering import costs.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). These orders apply to goods specified in the application, provided they meet the core criteria as stipulated in section 269C of the Act. The core criteria necessitate that, on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. This application process is relevant to any person seeking a tariff concession for specific goods, as long as those goods are not excluded under section 269SJ. The geographic scope of this legislation is national, as it applies across Australia and is subject to the provisions of the Customs Act 1901. Once a TCO is issued, it applies to the goods specified from the date the application was lodged, as per subsection 269S(1) of the Act. The CEO is required to publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received for TCO No. 0803928. This TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities, but it does provide benefits to importers who can apply for duty refunds on goods imported since the TCO came into force.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0803928 under the Customs Act 1901 (section 269F) allow for the application for a Tariff Concession Order (TCO) by a person in respect of goods. Section 269C outlines the core criteria that must be met for an application to be considered, specifically that no substitutable goods were produced in Australia on the day the application was lodged. If the Chief Executive Officer of Customs (CEO) is satisfied that these criteria are met, they must issue a written TCO (section 269P(3)), specifying that the goods are subject to a prescribed rate of duty as outlined in the Customs Tariff Act 1995.
The obligations imposed by the Act on parties include the requirement for the CEO to assess the validity of a TCO application and ensure that it meets the core criteria specified in section 269C. Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may object to the making of the TCO (subsection 269K(1)). Additionally, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on any person for actions taken before the TCO comes into force (subsection 269S(1)).
The consequences of breach or non-compliance with the Act are not explicitly detailed in the provided text. However, it is reasonable to infer that failure to comply with the provisions regarding TCO applications could result in legal challenges or administrative penalties. Although specific penalties are not mentioned, breaches of customs legislation generally carry substantial civil and criminal penalties, which could include fines and imprisonment depending on the nature and severity of the breach.
In summary, the Tariff Concession Instrument No. 0803928 under the Customs Act 1901 facilitates the application for tariff concessions on certain goods, provided they meet the criteria outlined in the Act. The CEO has the responsibility of assessing applications and ensuring that the granting of TCOs is in compliance with the statutory requirements. While specific penalties for non-compliance are not outlined, the general framework of Australian customs legislation implies significant repercussions for breaches.