EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512183
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.
OBM International Trade Services Pty Ltd applied for a TCO in respect of certain transformer winding wires 12 September 2005.
Instrument
TCO No 0512183 was made on 25 November 2005. It declares that those certain transformer winding wires 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 269SA(2) (b) relevantly provides that a TCO is to be taken to have come into force on the day on which the local manufacturer ceased production of substitutable goods. Accordingly, TCO No. 0512183 is taken to have come into force on 12 September 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, provides a framework for the administration of customs and excise, including the establishment of a scheme for Tariff Concession Orders (TCOs). The introduction of Part XVA in the Act aimed to address the need for a mechanism that allows for tariff concessions on goods that are not produced domestically or are not substitutable with locally produced goods. The purpose is to encourage the importation of goods that cannot be manufactured in Australia, thereby benefiting consumers through potentially lower prices. Tariff Concession Instrument No. 0512183 was introduced following an application by OBM International Trade Services Pty Ltd for tariff concessions on certain transformer winding wires. The instrument was enacted to provide a zero per cent duty rate on these specific goods, effective from the date the local manufacturer ceased production, in line with the policy objective of reducing costs for importers and consumers by eliminating duties on non-substitutable imported goods.
Scope and Application
The Customs Act 1901, under Part XVA, provides the framework for Tariff Concession Orders (TCOs) which are administered by the Chief Executive Officer of Customs (CEO). These TCOs apply to specific goods, allowing for a lower rate of customs duty. The Act permits an application for a TCO from any person, provided the goods are not those specified in section 269SJ, which outlines goods ineligible for TCOs. The CEO is required to evaluate applications against the core criteria set forth in section 269C, which mandates that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. This application process ensures that the concessions are granted only when necessary, and the CEO's decision is communicated through the Gazette, inviting submissions from interested parties. The TCO No. 0512183, for example, was issued for certain transformer winding wires, applying a duty rate of free, as opposed to the general rate of 5%. This concession is effective from the date of the application, 12 September 2005, and does not affect pre-existing rights or impose new liabilities on any person. Importers can benefit by applying for duty refunds on goods imported since the commencement date of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) include sections 269F, 269C, and 269P. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the application is not in relation to goods specified in section 269SJ, which lists goods that cannot be subject to a TCO, the CEO must assess whether the application meets the core criteria outlined in section 269C. If the CEO is satisfied that the application meets these criteria, they must issue a written order under section 269P(3), declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations and requirements imposed by the Act on the parties involved include the necessity for the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice includes an invitation for any interested party to submit reasons why the TCO should not be made. For instance, in the case of TCO No. 0512183, no submissions were received in response to the published notice. Furthermore, the Act ensures that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, so as to disadvantage that person or impose liabilities for anything done or omitted before the registration date.
There are no explicit offences, penalties, or civil/criminal consequences stated in the Act for breaches related to TCO applications. However, the Act does ensure that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO is taken to have come into force. This provision highlights the importance of adhering to the stipulated processes and criteria for the application and issuance of TCOs, as any deviation could potentially lead to complications in the application of tariff concessions and the rights of the involved parties.