EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615932
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.
Sugar Australia Pty Ltd applied for a TCO in respect of certain flash explosion suppressor parts on 17 October 2006.
Instrument
TCO No 0615932 was made on 22 December 2006. It declares that those certain flash explosion suppressor parts 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. 0615932 is taken to have come into force on 17 October 2006.
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 for the administration of customs and excise duties in Australia. It established a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The purpose of these orders is to provide tariff concessions, thereby lowering the customs duty rate on specified goods. This legislative instrument, F2007L00063, was introduced to address the gap in providing tariff concessions for certain imported goods where no substitutable goods are produced in Australia. In this specific case, TCO No. 0615932 was made to grant a tariff concession on certain flash explosion suppressor parts, reducing their customs duty from 5% to 0%. The policy objective is to promote trade and economic efficiency by ensuring that Australian consumers and businesses have access to competitively priced imported goods. The Tariff Concession Order came into effect on the date the application was lodged, 17 October 2006, without imposing any liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, through its Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to specific goods, granting them a lower rate of customs duty as compared to the general tariff rate. A person can apply to the CEO for a TCO if the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must determine whether the application meets the core criteria outlined in section 269C, which requires that no substitutable goods are produced in Australia at the time of the application. The CEO must then make a written order if satisfied that the application is valid. The TCO's application extends to all persons and entities involved in the importation of the specified goods, thereby affecting their rights and obligations under the Customs Act. Geographically, the Act applies across the Commonwealth of Australia, and the TCOs are effective from the date the application is lodged, as per subsection 269S(1) of the Act. The rights of any person other than the Commonwealth are not adversely affected by a TCO, and no new liabilities are imposed on individuals or entities.
Key Provisions
The main sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) are sections 269C, 269F, and 269P. Section 269F allows a person to apply to the Chief Executive Officer of Customs for a TCO in respect of goods. If the application is not in relation to goods specified in section 269SJ, the CEO must determine if it meets the core criteria set out in section 269C. If the application meets these criteria, the CEO must make a written order, a TCO, declaring that the goods in question are subject to a prescribed tariff item. TCO No. 0615932 was made under these provisions, declaring that certain flash explosion suppressor parts are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a reduced duty rate of 0% instead of the general rate of 5%.
Under this Act, the obligations on the parties primarily concern the application process and the criteria for approval. The applicant must ensure that their application for a TCO is not in respect of goods specified in section 269SJ, which prohibits certain goods from being eligible for a TCO. Additionally, the CEO has a duty to assess whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This involves verifying that the goods in question cannot be replaced by goods produced domestically that serve the same purpose. If the CEO is satisfied that these criteria are met, they must proceed to issue a TCO.
There are no explicit offences or penalties mentioned in the sections of the Customs Act 1901 or the explanatory statement related to TCOs. However, the Act ensures that a TCO does not affect the rights of any person as at the date of registration to their disadvantage or impose liabilities on any person for actions taken before the registration date. The focus is on the procedural correctness and the criteria satisfaction for TCOs rather than punitive measures for non-compliance. The Act also provides a mechanism for importers to apply for a refund of duty on goods imported since the TCO came into force under the Regulations, which is beneficial for those importing the specified goods.