EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510890
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.
Kid Australia Pty Ltd applied for a TCO in respect of certain Light Assemblies on 17 August 2005.
Instrument
TCO No 0510890 was made on 28 October 2005. It declares that those certain Light Assemblies 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. 0510890 is taken to have come into force on 17 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 Tariff Concession Instrument No. 0510890 was enacted in 2005 under the Customs Act 1901 to address a gap in the existing tariff concession scheme, which allows for reduced customs duty rates on certain goods. This legislative instrument was introduced to provide a pathway for businesses to apply for tariff concessions on goods that are not produced domestically, thereby supporting import-reliant industries and potentially lowering costs for consumers. The instrument was enacted by the Australian Parliament and is designed to align with the policy objective of facilitating trade and economic efficiency by ensuring that the Australian market has access to competitively priced goods. The instrument allows for applications to the Chief Executive Officer of Customs, who has the authority to approve tariff concessions if specific criteria are met, such as the absence of domestic production of substitutable goods.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity that wishes to apply for a TCO in respect of goods, provided that the goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. A TCO effectively reduces the customs duty on specific goods if the CEO is satisfied that no substitutable goods are produced in Australia in the ordinary course of business. This Act has a national jurisdictional reach within Australia. The scope of the Act is further extended through subordinate instruments such as the Customs Tariff Act 1995, which specifies the items to which a TCO can apply. The Act does not disadvantage any person by affecting their rights as at the date of registration, nor does it impose liabilities on persons other than the Commonwealth in respect of actions taken before the registration date.
Key Provisions
The main operative sections of this legislation are sections 269C, 269P, and 269K of the Customs Act 1901, which govern the making and publication of Tariff Concession Orders (TCOs) (ss 269C, 269P, 269K). Section 269C of the Act sets out the core criteria that must be satisfied for an application for a TCO to be approved. This includes the requirement that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order (a TCO) (s 269P(3)). Once an application is accepted as valid, the CEO must publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (s 269K(1)).
The Customs Act 1901 imposes obligations on both the CEO of Customs and any person applying for a TCO. The CEO must assess whether an application meets the core criteria outlined in section 269C and, if so, make a TCO (s 269P(3)). The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties (s 269K(1)). An applicant for a TCO must provide all necessary information and evidence to the CEO to demonstrate that the goods in question meet the criteria for a concession (s 269F).
Failure to comply with the requirements of the Customs Act 1901 can result in various consequences. The Act does not specify any particular offences related to the making of TCOs, but breaches of its provisions could potentially lead to legal actions under other sections of the Act or related legislation. For example, providing false or misleading information in an application could be considered an offence under section 240 of the Crimes Act 1914, which deals with fraud and deception. Penalties for such offences can vary, but may include fines and imprisonment. Additionally, any person adversely affected by the making of a TCO may seek judicial review under the Administrative Decisions (Judicial Review) Act 1977.