EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513657
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.
Heat & Control Pty Ltd applied for a TCO in respect of certain Horizontal Cooker and/or Cooler on 7 October 2005.
Instrument
TCO No 0513657 was made on 3 January 2006. It declares that those certain Horizontal Cooker and/or Cooler 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. 0513657 is taken to have come into force on 7 October 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 was enacted to provide for the regulation of customs and excise, including the administration of customs and excise law and the collection of duties and taxes. The Act, which was passed by the Australian Parliament, establishes a framework for the importation and exportation of goods, aiming to facilitate trade while protecting domestic industries and generating revenue for the government. One of the key mechanisms under this Act is the provision for Tariff Concession Orders (TCOs), which can be made by the Chief Executive Officer of Customs to apply lower rates of customs duty on specified goods. This was introduced to address the need for tariff flexibility to support certain industries by reducing the duty burden on specific goods, thereby promoting competitive pricing and economic growth. The policy objective is to ensure that such concessions are granted judiciously, ensuring they meet the core criteria of no substitutable goods being produced in Australia, thereby maintaining a balance between supporting industry and protecting local production.
Scope and Application
The Tariff Concession Instrument No. 0513657 under the Customs Act 1901 applies to any entity or individual seeking a tariff concession order (TCO) for specific goods, in this case, certain Horizontal Cooker and/or Cooler, and provides a lower rate of customs duty for these goods. The Act applies to the Chief Executive Officer of Customs (CEO) who is responsible for deciding whether an application for a TCO meets the core criteria and, if so, making the order. The Act has a Commonwealth jurisdictional reach as it is an instrument under the Customs Act 1901. The TCO does not apply to goods specified in section 269SJ of the Act, which are goods that cannot be subject to a TCO. The application of the TCO extends through subordinate instruments such as the Customs Tariff Act 1995 and the Customs Regulations 1999. The TCO does not affect the rights of any person other than the Commonwealth as at the date of registration and does not impose any liabilities on any person.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). A TCO allows for a reduced rate of customs duty on specified goods, provided the application meets certain criteria. An applicant can submit an application to the CEO, who must consider whether the goods in question meet the core criteria outlined in section 269C of the Act. This includes ensuring that no substitutable goods were produced in Australia on the day the application was lodged (section 269D and 269E).
The obligations imposed on parties by the Act include the requirement for applicants to ensure their applications are valid and that the goods in question are not specified in section 269SJ, which lists goods ineligible for a TCO. The CEO is mandated to publish a notice in the Gazette inviting submissions from any interested parties if the application is accepted as valid (subsection 269K(1)). Additionally, the CEO must make a written TCO if satisfied that the application meets the core criteria, specifying the applicable item from Schedule 4 of the Customs Tariff Act 1995 (subsection 269P(3)).
In terms of consequences for non-compliance, the Act does not explicitly outline specific offences or penalties for breaches related to TCOs. However, any misuse or improper application for a TCO could potentially be subject to general legal scrutiny under the Customs Act. The Act does provide that a TCO does not affect the rights of persons, other than the Commonwealth, as at the date of registration and does not impose liabilities on any person (subsection 269S(1)). This means that while the Act provides clear pathways for concession orders, it also aims to protect the interests of other stakeholders by ensuring that rights are preserved and liabilities are not retroactively imposed.