EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514123
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 Electric Winches on 12 October 2005.
Instrument
TCO No 0514123 was made on 3 January 2006. It declares that those certain Electric 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. 0514123 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 was enacted by the Parliament of Australia to establish a framework for the regulation of customs and excise duties, among other things. One of the mechanisms within this framework is the Tariff Concession Order (TCO), which can be applied for by individuals or companies to obtain a lower rate of customs duty on specific goods. The problem or gap addressed by this legislation is the need for a mechanism to grant tariff concessions on imported goods under certain conditions. The Tariff Concession Instrument No. 0514123 was introduced to provide a practical application of this mechanism. It was made by the Chief Executive Officer of Customs and declares that certain Electric Winches, as applied for by TJM Products Pty Ltd, are subject to a zero percent duty rate, down from the standard 5 percent, as no substitutable goods were produced in Australia. This legislative instrument aims to support Australian businesses by reducing the cost of imported goods where no local alternatives exist.
Scope and Application
The Tariff Concession Instrument No. 0514123 under the Customs Act 1901 applies to goods that are subject to a Tariff Concession Order (TCO), specifically certain Electric Winches in this case. This legislation allows for the reduction of customs duties on specified goods when no substitutable goods are produced in Australia in the ordinary course of business. The application and subsequent granting of a TCO are overseen by the Chief Executive Officer of Customs, who must ensure the application meets the core criteria as outlined in the Act. The scope of this Act encompasses entities and individuals involved in the importation of these goods, particularly importers who may benefit from the reduced duty rate.
The geographic reach of this Act is national, applying throughout Australia, as it pertains to the Customs Act 1901 which is a Commonwealth Act. The application process, which includes the ability for interested parties to submit objections, is intended to ensure transparency and fairness in the concession process. Notably, the Act specifies exclusions for certain goods as per section 269SJ, which cannot be subject to a TCO. The commencement of the TCO is effective from the date the application was lodged, which in this instance was 12 October 2005. The Act does not impose any new liabilities on persons other than the Commonwealth and does not affect pre-existing rights, although it may provide beneficial rights to importers in terms of duty refunds.
Key Provisions
The main operative sections of the Customs Act 1901 (section 269F) enable an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). This provision allows for a lower rate of customs duty on specified goods if the application meets the core criteria (section 269C). Specifically, the application must relate to goods that are not specified in section 269SJ, and no substitutable goods must be produced in Australia on the date the application is lodged (section 269C). If the CEO is satisfied that these criteria are met, they must make a TCO declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)).
The obligations imposed by the Act on the parties involved are primarily centred on the application process and the conditions that must be met for a TCO to be granted. The applicant must ensure that their application is valid and that the goods in question do not have substitutable counterparts produced in Australia. The CEO, upon receiving a valid application, must consider whether it meets the core criteria and, if so, issue a TCO. The CEO is also required to publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). If no submissions are received, the CEO must proceed with the TCO.
The Act does not explicitly state offences, penalties, or civil/criminal consequences for breach of the provisions related to TCOs. However, it is implied that any misrepresentation or incorrect information in the TCO application could lead to administrative consequences, such as the revocation of the TCO or other corrective actions by the CEO. Furthermore, while not detailed in the Act, any failure to comply with the terms of the TCO could result in the imposition of standard customs duties retroactively, or other penalties as prescribed under the Customs Act 1901.
The TCO itself, once issued, has the effect of reducing the duty on the specified goods to zero, provided the terms and conditions of the order are met. This benefit is available to importers who have already imported the goods since the effective date of the TCO, who can apply for a refund of duty paid under the relevant regulations (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not affect any existing rights or impose any liabilities on persons other than the Commonwealth in relation to actions taken before the TCO was registered.