EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0506773
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.
W.W. Wedderburn Pty Ltd applied for a TCO in respect of certain dial scales on 06 June 2005.
Instrument
TCO No 0506773 was made on 07 October 2005. It declares that those certain dial scales 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. 0506773 is taken to have come into force on 06 June 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 Customs Act 1901, enacted by the Australian Parliament, was designed to regulate the importation and exportation of goods within Australia, ensuring that customs duties and other charges are properly levied. To address specific trade needs and promote economic efficiency, the Act allows for the creation of Tariff Concession Orders (TCOs) through Part XVA. This mechanism enables the Chief Executive Officer of Customs to apply lower rates of customs duty on certain goods, provided that no substitutable goods are produced in Australia and the application meets the core criteria. The policy objective behind these concessions is to support industries by reducing the cost of imported goods and fostering a competitive trading environment.
In 2005, Tariff Concession Instrument No. 0506773 was introduced to address a specific application by W.W. Wedderburn Pty Ltd for lower customs duties on certain dial scales. After evaluating the application, the CEO determined that no substitutable goods were produced in Australia, thus satisfying the core criteria under section 269C of the Act. Consequently, the instrument declared that these dial scales would be subject to a duty rate of free, down from the general rate of 5%. The instrument came into force on the date of the application, 06 June 2005, and did not disadvantage any existing rights or impose new liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0506773 under the Customs Act 1901 applies to individuals or entities that have applied for a Tariff Concession Order (TCO) in relation to specific goods. This legislative instrument specifically addresses the concession of customs duty for certain dial scales as applied by W.W. Wedderburn Pty Ltd. The Act allows the Chief Executive Officer of Customs to consider applications for TCOs, which effectively lower or eliminate customs duty for the specified goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The TCO applies nationally, within the Commonwealth of Australia, and affects the rights of importers by potentially allowing them to claim a refund of duty on goods imported from the date the TCO is deemed to have come into force. Importantly, the TCO does not disadvantage any person by imposing liabilities for actions taken prior to its registration nor does it affect the rights of any person other than the Commonwealth.
The application of this Act is confined to the goods specified in the TCO, in this case, certain dial scales, and does not extend to goods listed in section 269SJ of the Act, which are ineligible for tariff concessions. The Act allows for the extension of its application through subordinate instruments, although the current TCO No. 0506773 does not introduce new exclusions beyond those already stipulated in the primary legislation. The CEO’s decision-making process includes a requirement to publish a notice in the Gazette, inviting submissions from any interested parties, though in this instance, no such submissions were received. The TCO came into force on the date the application was lodged, 06 June 2005, and does not impose any new liabilities on persons other than the Commonwealth.
Key Provisions
The key provisions of this legislation are found in Part XVA of the Customs Act 1901, which outlines the scheme for Tariff Concession Orders (TCOs). 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, which lists those that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, as outlined in sections 269C, 269B, and 269D of the Act, the CEO must make a written TCO order (section 269P(3)). The application from W.W. Wedderburn Pty Ltd for certain dial scales was processed and resulted in TCO No 0506773, which was made on 7 October 2005, declaring that the dial scales are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free as opposed to the general rate of 5%.
The Act imposes certain obligations on the CEO and applicants for TCOs. The CEO must determine whether an application meets the core criteria (section 269C) and, if so, make a TCO (section 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). In this instance, the CEO received no submissions in response to the published notice. The TCO will have retrospective effect from the date the application was lodged (subsection 269S(1)), meaning that TCO No 0506773 is taken to have come into force on 6 June 2005, the date on which the application was lodged.
There are no specified offences or penalties in the Customs Act 1901 for failing to comply with the requirements of the TCO scheme. However, any breach of the conditions of a TCO may result in the cancellation of the TCO and the imposition of the general rate of duty on the goods concerned. 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. Importers of such goods will benefit from being 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.