EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0413763
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.
Trident Tooling Pty Ltd applied for a TCO in respect of certain forged discs on 22 December 2004.
Instrument
TCO No 0413763 was made on 18 March 2005. It declares that those certain forged discs 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 3%.
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. 0413763 is taken to have come into force on 22 December 2004.
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, including the establishment of a scheme for Tariff Concession Orders (TCOs) under Part XVA. This scheme allows for the application of lower customs duty rates to certain goods, provided they meet specific criteria. The Tariff Concession Instrument No. 0413763 was introduced to address a particular case where Trident Tooling Pty Ltd sought a concession on certain forged discs. The instrument was enacted to facilitate a reduced duty rate of 3% on these goods, down from the general rate of 5%, upon the Chief Executive Officer of Customs determining that no substitutable goods were produced in Australia. This legislative action aims to benefit importers by potentially allowing them to claim refunds on duties paid since the effective date of the concession, 22 December 2004, while ensuring no retroactive liabilities are imposed on any party.
Scope and Application
The Tariff Concession Instrument No. 0413763 under the Customs Act 1901 applies to any entity or individual who has lodged an application for a Tariff Concession Order (TCO) for specific goods, namely certain forged discs in this instance. The Act specifically targets the process of applying for and granting TCOs to provide a reduced rate of customs duty on eligible goods, contingent upon the goods not having a substitutable equivalent produced in Australia. The application process and the criteria for granting such concessions are detailed within Part XVA of the Customs Act 1901, with the Chief Executive Officer of Customs (CEO) being the authority responsible for evaluating and approving TCO applications. The geographic reach of this legislation is national, as it pertains to the Commonwealth of Australia and its customs regulations.
The application and effect of the TCO are subject to certain exclusions and conditions. For example, goods specified in section 269SJ of the Act are ineligible for a TCO. The application process requires public consultation as per section 269K(1) of the Act, although in this case, no objections were received. The TCO, once granted, has retrospective effect from the date of the application, meaning that it applies to goods imported from that date onwards. Importantly, the TCO does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on individuals or entities, although it does entitle importers to apply for a refund of duty paid on the eligible goods since the effective date of the TCO.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0413763 under the Customs Act 1901 (section 269C, 269F, 269P, 269K, 269SJ, 269D, 269E) establish a framework for the application and approval of Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO on certain goods. If the CEO determines that the application meets the core criteria set out in section 269C, and the goods are not prohibited from TCO under section 269SJ, a TCO is made. Section 269P(3) mandates that the CEO must issue a written order declaring that the specified goods are subject to a reduced rate of customs duty. Section 269K requires the CEO to publish a notice in the Gazette inviting submissions from interested parties, although no submissions were received in this instance.
The Act imposes certain obligations on both the applicant and the CEO. The applicant must ensure their application meets the criteria outlined in section 269C, particularly that no substitutable goods are produced in Australia (section 269D). The CEO, upon receiving a valid application, must evaluate whether the application satisfies the core criteria, consult with relevant parties by publishing a notice in the Gazette (section 269K), and if satisfied, make a written TCO (section 269P(3)). The TCO specifies the reduced duty rate applicable to the goods as stated in the Customs Tariff Act 1995.
Failure to comply with the requirements of the Customs Act 1901 or the terms of a TCO may lead to various legal consequences. Section 269S(1) of the Act stipulates that a TCO is effective from the date the application was lodged. Any breach of the terms or misrepresentation in the application process could potentially result in civil or criminal penalties. The exact penalties are not detailed in the explanatory statement, but under general provisions of the Customs Act, breaches can attract fines and imprisonment, depending on the severity and intent of the offence. The TCO itself does not impose liabilities on any person for actions taken prior to its registration date.