EXPLANATORY STATEMENT
Tariff Concession Instrument No.0502885
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.
Hardchrome Engineering Pty Ltd applied for a TCO in respect of certain nitriding furnaces on 4 March 2005.
Instrument
TCO No 0502885 was made on 20 May 2005. It declares that those certain nitriding furnaces 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 0%.
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.0502885 is taken to have come into force on 4 March 2005.
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 Tariff Concession Instrument No.0502885, made under the Customs Act 1901, aims to address the issue of applying tariff concessions to specific goods, in this case certain nitriding furnaces, by reducing the customs duty on them. Enacted by the Chief Executive Officer of Customs, this instrument responds to an application by Hardchrome Engineering Pty Ltd, which sought a tariff concession for goods that do not have substitutable alternatives produced in Australia. The policy objective is to facilitate trade by providing duty relief on imported goods that are not locally produced, thereby encouraging economic efficiency and competitive pricing in the market. The instrument ensures that the rights of importers are positively impacted, allowing them to seek duty refunds for goods imported since the tariff concession came into effect on 4 March 2005. Importantly, it does not disadvantage or impose new liabilities on any party other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No.0502885 under the Customs Act 1901 pertains to the application and approval of a Tariff Concession Order (TCO) for certain nitriding furnaces, which were applied for by Hardchrome Engineering Pty Ltd on 4 March 2005. The Act applies to any individual or entity seeking tariff concessions for goods, particularly those that are not produced domestically in an ordinary course of business, and thus qualify for a lower customs duty rate. The TCO applies nationally across Australia, aligning with the overarching framework set out in Part XVA of the Customs Act 1901. The TCO exempts the specified nitriding furnaces from the standard customs duty rate, reducing it from 5% to 0%, effective from the date the application was lodged, which is 4 March 2005. Notably, the TCO does not impose any new liabilities or disadvantage any persons other than the Commonwealth, and it does not affect any existing rights as of the date of registration.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0502885 under the Customs Act 1901 (section 269P(3)) involve the Chief Executive Officer of Customs (CEO) making a written order, known as a Tariff Concession Order (TCO), for specific goods upon satisfaction that certain criteria are met. Section 269C stipulates that an application for a TCO is considered if no substitutable goods are produced in Australia at the time the application is lodged. "Substitutable goods" are defined in section 269D as goods produced in Australia that can be used in a manner similar to the goods in question. If the CEO is satisfied that the application meets these criteria, the CEO must issue a TCO, as per section 269P(3), which then applies a prescribed lower rate of customs duty to the specified goods.
Under the Act, the CEO is obligated to consider the application for a TCO and to ensure that it meets the core criteria outlined in section 269C. The CEO must also publish a notice in the Gazette, as per section 269K(1), inviting any interested parties to submit objections or submissions if they believe the TCO should not be granted. In this instance, no submissions were received, indicating that no objections were raised. Additionally, section 269S(1) specifies that a TCO comes into force on the date the application was lodged, which for this case was 4 March 2005.
In terms of consequences for breach, the Act does not specify any offences or penalties directly related to the TCO process itself. However, the TCO does not affect the rights of any person as at the date of registration, ensuring that no one (other than the Commonwealth) is disadvantaged or imposed with liabilities for actions taken before the TCO registration date. Importers of the specified goods may apply for a refund of duty under Regulation 126(1)(r) for goods imported since the TCO came into force. This refund process does not impose any new liabilities on any person.
The Tariff Concession Instrument No. 0502885, therefore, facilitates a streamlined process for obtaining a tariff concession, provided all legislative criteria are met. The CEO's role is pivotal in ensuring that the application aligns with the statutory requirements and that any potential objections are addressed. The TCO's effective date and the absence of retroactive liabilities further underscore the structured approach to tariff concessions within the framework of the Customs Act 1901.