EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509427
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.
Abet Pty Ltd applied for a TCO in respect of certain postformed laminates on 13 July 2005.
Instrument
TCO No 0509427 was made on 07 October 2005. It declares that those certain postformed laminates 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. 0509427 is taken to have come into force on 13 July 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. 0509427, enacted under the Customs Act 1901, addresses the problem of providing tariff concessions for specific goods that are not produced domestically. The Customs Act 1901 establishes a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs), which allow for reduced customs duty rates on certain imported goods, provided that these goods are not substitutable by domestically produced alternatives. The objective of this legislation, as stated in the Act, is to ensure that tariff concessions are granted fairly and do not adversely affect domestic producers. Abet Pty Ltd applied for a TCO for certain postformed laminates, and following a determination by the CEO that no substitutable goods were produced in Australia, the TCO was granted, setting the duty rate for these goods to free, effective from 13 July 2005.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at providing lower rates of customs duty on specific goods. This process applies to any person who may apply for such concessions in relation to goods not specified in section 269SJ of the Act, which outlines goods ineligible for TCOs. The application process requires the CEO to determine whether the application meets the core criteria set out in section 269C, which mandates that no substitutable goods are produced in Australia in the ordinary course of business. For the purposes of these provisions, terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are defined in sections 269D, 269E, and 269F respectively. The application of a TCO, as seen in TCO No. 0509427 concerning certain postformed laminates, results in the goods being subject to a free rate of duty instead of the general rate of 5%. This legislation operates on a Commonwealth level and its application may be further refined through subordinate instruments, though specific exclusions or exemptions are detailed within the Act itself.
Key Provisions
The main operative sections of this legislation revolve around the provisions for making Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows for applications to be made to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods. If the application meets the core criteria specified in section 269C, the CEO must then make a written order (TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (Tariff). In this case, TCO No. 0509427 was made on 7 October 2005 for certain postformed laminates, which are now subject to a duty-free rate as per item 50 of Schedule 4 to the Tariff.
The Act imposes several obligations on the parties involved. For instance, section 269K(1) mandates that the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice includes an invitation for any person who believes the TCO should not be made to lodge a submission with the CEO. Additionally, the CEO must ensure that the application meets the core criteria, which include verifying that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Section 269P(3) further requires the CEO to make a written TCO if the application satisfies the core criteria.
There are no explicit offences, penalties, or civil/criminal consequences for breach detailed within the Act in relation to the making of TCOs. However, the provisions ensure that the rights of individuals and entities are protected, particularly under the condition that the TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration to disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)). This means that while the TCO may confer benefits such as a refund of duty for importers (paragraph 126(1)(r) of the Regulations), it does not impose any new liabilities on any person. The Act ensures that the rights of importers will be beneficially affected, and no existing rights will be adversely impacted by the TCO.