EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516803
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.
Hylec Controls Pty Ltd applied for a TCO in respect of certain concrete test cylinder end grinding wheels on 16 December 2005.
Instrument
TCO No 0516803 was made on 10 March 2006. It declares that those certain concrete test cylinder end grinding wheels 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 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. 0516803 is taken to have come into force on 16 December 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 Commonwealth Parliament, established a framework within which Tariff Concession Orders (TCOs) could be made to apply a lower rate of customs duty on certain goods. This was intended to address the gap in the legislative system where certain goods may not have had a viable local substitute, thereby potentially benefiting Australian industries by making imported goods more competitive. The explanatory statement details Tariff Concession Instrument No. 0516803, which was enacted on 10 March 2006, to provide tariff concessions for specific concrete test cylinder end grinding wheels, effectively reducing the duty from 5% to free, following an application by Hylec Controls Pty Ltd on 16 December 2005. The instrument was made after the CEO of Customs was satisfied that no substitutable goods were produced in Australia. The policy objective was to ensure that such concessions did not disadvantage any person other than the Commonwealth and to allow for potential duty refunds for importers of these goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that apply reduced customs duty rates to certain goods. These orders are available to any person who applies and meets the core criteria stipulated in the Act. A TCO can only be issued if no substitutable goods are being produced in Australia in the ordinary course of business, as per section 269C. The application process requires the CEO to consider the specific goods in question and ensure they do not fall under the restricted list outlined in section 269SJ. If the criteria are satisfied, a TCO is issued, granting the applicant a lower duty rate than the general rate. The application and issuance process are subject to public notice, allowing interested parties to submit objections, although in the case of TCO No. 0516803, no objections were received. This order specifically pertains to certain concrete test cylinder end grinding wheels, applying a zero duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, effective from the date the application was lodged, 16 December 2005. This TCO benefits importers by potentially allowing them to claim duty refunds for goods imported since the effective date, without imposing any liabilities on non-Commonwealth entities.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0516803 under the Customs Act 1901, particularly section 269C, establish the criteria for Tariff Concession Orders (TCOs). A TCO application must be considered if it is made for goods that are not specified in section 269SJ and if, on the day of application, no substitutable goods are produced in Australia in the ordinary course of business (sections 269F and 269C). If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these core criteria, they are required to issue a written TCO order (section 269P(3)). This particular TCO, No. 0516803, applies to certain concrete test cylinder end grinding wheels, which are now subject to a duty rate of free, down from the general rate of 5% (section 269P(3)).
The obligations imposed by the Act on the parties involved include the requirement for the CEO to consider the application and ensure it meets the core criteria (section 269C). The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, although no such submissions were received in this case (subsection 269K(1)). Additionally, the CEO must ensure that the TCO does not adversely affect the rights of any person as they existed at the date of registration, nor impose any liabilities on them in respect of actions taken before the registration date (subsection 269S(1)).
In terms of consequences for breach, the Act does not explicitly state offences or penalties related to the TCO process itself. However, the general principles of administrative law apply, and any failure by the CEO to properly consider an application or to adhere to the statutory requirements could potentially lead to judicial review or other remedies under administrative law. It is also important to note that while the TCO does not impose liabilities on any person, any failure to comply with the terms of the TCO once it is in effect could lead to enforcement actions under the Customs Act 1901, including potential fines and other penalties for non-compliance with customs regulations.