EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514072
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.
TJM Products Pty Ltd applied for a TCO in respect of certain Hydraulic Winches on 12 October 2005.
Instrument
TCO No 0514072 was made on 3 January 2006. It declares that those certain Hydraulic Winches 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. 0514072 is taken to have come into force on 12 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, enacted by the Parliament of Australia, provides a framework for the administration of customs and excise duties. The Act was introduced to address the need for streamlined processes in tariff management and the facilitation of trade. Specifically, Part XVA of the Customs Act 1901 sets out provisions for Tariff Concession Orders (TCOs), which are used to grant lower rates of customs duty on certain goods. This mechanism ensures that Australian industries can access goods at reduced costs where no substitutable goods are produced domestically. The policy objective underpinning the introduction of TCOs is to support Australian businesses by lowering the cost of imported goods that are critical for production and design purposes, thereby promoting economic efficiency and competitiveness without disadvantaging existing rights or imposing new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0514072 pertains to the Customs Act 1901 and applies specifically to the application and processing of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation is relevant to individuals and entities seeking to import goods into Australia that are eligible for a lower rate of customs duty. The scope of the Act extends to the examination and approval of applications for TCOs by the CEO, provided that the goods in question are not specified in section 269SJ of the Act, which outlines those goods that are ineligible for a TCO. The application of a TCO is contingent on the CEO's determination that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as per section 269C. The Act's jurisdictional reach is national, applying uniformly across Australia, and the terms "substitutable goods," "goods produced in Australia," and "ordinary course of business" are defined in sections 269D, 269E, and 269F respectively. The Act allows for the extension or restriction of its application through subordinate instruments, thereby providing flexibility in its implementation and enforcement.
Key Provisions
The main operative sections of the Customs Act 1901 that are relevant to Tariff Concession Orders (TCOs) include sections 269F, 269C, 269B, 269P, and 269K. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO determines that the application meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged (section 269C), they are required to make a written order (section 269P(3)). Section 269B defines the terms used in the core criteria, including "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269K mandates that the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made.
The Customs Act 1901 imposes several obligations on the parties involved in the TCO process. Firstly, the CEO must assess whether an application meets the core criteria as stipulated in section 269C, which involves determining if substitutable goods were produced in Australia. Additionally, the CEO is required to publish a notice in the Gazette under section 269K, inviting any interested parties to submit their views on the proposed TCO. If no submissions are received, the CEO proceeds to make the TCO. Importers of goods subject to a TCO benefit from a reduced rate of customs duty, and they may apply for a refund of duty paid on goods imported since the TCO's effective date under the Customs (Tariff) Regulations 1997.
The Customs Act 1901 does not explicitly outline offences or penalties for breaches related to the issuance of TCOs. However, any failure to comply with the obligations set out in the Act, such as inaccurately assessing an application or failing to publish a notice in the Gazette, could potentially result in administrative consequences or legal challenges. The Act does not specify maximum penalties for such breaches, implying that any enforcement would likely depend on the specific circumstances and the applicable administrative or judicial processes.