EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1010608
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.
Boc Ltd applied for a TCO in respect of certain biocide fumigants on 02 March 2010.
Instrument
TCO No 1010608 was made on 21 May 2010. It declares that those certain biocide fumigants 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. 1010608 is taken to have come into force on 02 March 2010.
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, provides a framework for the administration of customs and excise duties, and the regulation of the importation and exportation of goods. It establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). The objective of the Customs Act 1901, as stated in the explanatory statement for Tariff Concession Instrument No. 1010608, is to facilitate the concession of tariff rates on certain goods that meet specific criteria. This legislative instrument addresses the gap in the application of reduced tariff rates on goods that are not produced in Australia and do not have substitutable alternatives produced domestically. The Tariff Concession Instrument No. 1010608, made on 21 May 2010, grants a tariff concession for certain biocide fumigants, reducing the general rate of duty from 5% to free. This instrument was introduced following an application by Boc Ltd and was effective from 02 March 2010, the date the application was lodged.
Scope and Application
The Customs Act 1901 applies to individuals and entities involved in the importation of goods into Australia, particularly those seeking tariff concessions on specific items. The Act's scope extends to the Chief Executive Officer of Customs, who is responsible for assessing and making Tariff Concession Orders (TCO) for goods not produced in Australia in the ordinary course of business. This includes determining whether the application meets the core criteria as outlined in the Act. The geographic reach of the Act is national, as it applies across all states and territories within Australia. The Act excludes certain goods specified in section 269SJ from being subject to a TCO, which includes goods that can be produced in Australia or those that are considered substitutable. The application of the Act can be extended or restricted through subordinate instruments, such as regulations or orders made under the authority of the Act. The Tariff Concession Instrument No. 1010608, which was made on 21 May 2010, is an example of such an instrument, providing tariff concessions on certain biocide fumigants, resulting in a free rate of duty instead of the general rate of 5%.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, a TCO can be made. Specifically, section 269C stipulates that the application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P requires the CEO to make a written order if satisfied that the application meets these criteria.
The Act imposes several obligations on the CEO regarding TCO applications. The CEO must ensure that the application is not in respect of goods specified in section 269SJ, and then determine whether the application meets the core criteria. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, subsection 269K(1) requires the CEO to publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made. In the case of TCO No. 1010608, the CEO did not receive any submissions in response to this invitation.
Failure to comply with the requirements of the Customs Act 1901 or the associated regulations could lead to various consequences. While the specific offences and penalties are not detailed in the provided text, it is clear that the Act and its associated regulations are designed to ensure that the tariff concession process is followed correctly to prevent unfair advantages and to protect the interests of all parties involved. The penalties for non-compliance could include fines or other legal sanctions, though the exact penalties would depend on the specific nature and severity of the breach. The Act ensures that the rights of persons other than the Commonwealth are protected, and any liabilities imposed by the TCO only apply to the Commonwealth, not to other entities or individuals.