EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509997
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.
SIA Abrasives applied for a TCO in respect of certain cut-off aluminium oxide wheels on 01 August 2005.
Instrument
TCO No 0509997 was made on 07 October 2005. It declares that those certain cut-off aluminium oxide wheels 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. 0509997 is taken to have come into force on 01 August 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 Parliament of Australia, establishes a framework for the application and management of Tariff Concession Orders (TCOs) to facilitate trade by reducing customs duties on certain imported goods. The Act addresses the problem of ensuring that Australian industries remain competitive by allowing the Chief Executive Officer of Customs to grant tariff concessions under specific conditions, thereby supporting the policy objective of fostering economic growth through trade. This legislative instrument was introduced to ensure that the application process for tariff concessions is transparent and fair, allowing for public consultation while maintaining the efficiency of the customs regime.
The Explanatory Statement for Tariff Concession Instrument No. 0509997, made on 07 October 2005, highlights the application process for TCOs and the decision-making criteria, ensuring that no substitutable goods are produced in Australia at the time of application. The instrument grants a tariff concession on certain cut-off aluminium oxide wheels, reducing their duty from 5% to free, effective from 01 August 2005. This measure aims to benefit importers by potentially allowing them to claim refunds on duties paid before the concession came into effect, without imposing any new liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). This Act applies to individuals and entities who apply for TCOs in respect of goods, particularly those who wish to import specific goods into Australia and benefit from lower customs duty rates. The scope of the Act is national, extending across the Commonwealth of Australia. The TCO process allows for a lower rate of customs duty on goods that meet the specified criteria, provided that no substitutable goods are produced in Australia at the time of the application. The Act also includes provisions for exemptions, notably excluding certain goods as specified in section 269SJ from the TCO scheme. The CEO is mandated to make written orders for TCOs if an application meets the core criteria, which are defined in sections 269C, 269D, and 269E of the Act. Once a TCO is registered, it does not retroactively affect the rights of any person, except to provide potential benefits such as duty refunds for importers under certain conditions.
Key Provisions
The main operative sections of the Customs Act 1901 under this Tariff Concession Instrument (F2005L03233) are sections 269C, 269F, and 269P(3) (sections 269C, 269F, and 269P(3)). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO), while section 269C stipulates the core criteria that must be met for the application to be valid. If the CEO is satisfied that the application meets these criteria, they must make a written order (TCO) under section 269P(3), declaring that the goods in question are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. In this case, TCO No. 0509997 was made for certain cut-off aluminium oxide wheels, reducing their duty rate from 5% to free.
The obligations and requirements imposed by the Act on the parties involved are primarily administrative. The CEO must ensure that the TCO application meets the core criteria before making the written order. Additionally, as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette, inviting any interested parties to lodge a submission if they believe the TCO should not be made (subsection 269K(1)). In this instance, the CEO did not receive any submissions in response to the published notice. The Act also requires that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged (subsection 269S(1)), which in this case is 01 August 2005.
The Act does not specify any offences, penalties, or civil/criminal consequences for breach related to the TCO process itself. However, it does provide that a 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 (subsection 269T(1)). In practical terms, this means that the rights of importers will be beneficially affected, and 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.