EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510519
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.
Primary Metals and Alloys Pty Ltd applied for a TCO in respect of certain brass bars and/or rods and/or profiles on 10 August 2005.
Instrument
TCO No 0510519 was made on 04 November 2005. It declares that those certain wheel bolts 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. 0510519 is taken to have come into force on 10 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 Commonwealth Parliament, provides a framework under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO). The Tariff Concession Instrument No. 0510519 was introduced to address the need for concessional tariff rates on specific goods not produced in Australia. The policy objective is to provide relief on imported goods that have no Australian-made equivalents, thereby encouraging trade and reducing costs for importers. This instrument specifically grants tariff concessions on certain brass bars and/or rods and/or profiles, reducing the general duty rate of 5% to free. The CEO was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria for the concession. The instrument was registered on the day the application was lodged, 10 August 2005, and no submissions were received against it.
Scope and Application
The Tariff Concession Instrument No. 0510519, issued under the Customs Act 1901, applies to goods specified in the instrument, namely certain wheel bolts. This Act pertains to entities or individuals involved in the import of these goods, with the primary beneficiaries being importers who can avail themselves of the tariff concessions outlined. The application of this instrument is limited to the Commonwealth jurisdiction, with no specified exclusions or exemptions other than those outlined in section 269SJ of the Customs Act, which precludes certain goods from being subject to a Tariff Concession Order (TCO). The instrument extends its application by detailing the specific goods eligible for the tariff concession, as outlined in Schedule 4 of the Customs Tariff Act 1995, and sets the duty rate for these goods at free, as opposed to the general rate of 5%. The TCO does not retroactively affect the rights of any person other than the Commonwealth, nor does it impose any liabilities on any person. Instead, it aims to benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the instrument's effective date.
Key Provisions
The Customs Act 1901, specifically Part XVA, outlines a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). An application for a TCO can be submitted by any person (s 269F), and if the CEO determines that the application is not for goods specified in section 269SJ, they must assess whether it meets the core criteria (s 269C). A TCO application meets the core criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). Definitions for key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269P respectively.
Entities or individuals must comply with the requirements set forth in the Customs Act 1901 when applying for a TCO. This includes ensuring that the application is made in respect of goods that are not specified in section 269SJ and that no substitutable goods were produced in Australia at the time the application was lodged. The CEO is obligated to consider all applications and, if the criteria are met, issue a written order (TCO) that specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question (s 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit any objections to the proposed TCO, although in this instance, no submissions were received (s 269K(1)).
Failure to comply with the requirements of the Customs Act 1901 when applying for a TCO may result in the CEO declining to issue the order. However, the Act does not explicitly outline specific criminal or civil penalties for such breaches. The TCO itself does not impose any liabilities on any person and does not affect the rights of any person other than the Commonwealth (s 269S(1)). Instead, the focus is on ensuring that the tariff concessions are granted appropriately and that the process is transparent and open to scrutiny from interested parties.
The Customs Act 1901 provides that a TCO is taken to have come into force on the day on which the application for the TCO was lodged (s 269S(1)). This means that, in this instance, TCO No. 0510519 is effective from 10 August 2005. The TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration in a way that would disadvantage them or impose liabilities in respect of anything done or omitted to be done before the date of registration. Importers, however, will benefit from the TCO as they may apply for a refund of duty on goods imported since the TCO came into force (Reg 126(1)(r)). This provision ensures that those who have already imported goods prior to the TCO coming into force are not unfairly disadvantaged by the retrospective application of the concession.