EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616925
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.
C–Cut Tools Pty Ltd applied for a TCO in respect of certain holesaws on 7 September 2006.
Instrument
TCO No 0616925 was made on 24 November 2006. It declares that those certain holesaws 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. 0616925 is taken to have come into force on 7 September 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 Tariff Concession Instrument No. 0616925 was enacted in 2006 under the Customs Act 1901 to address the issue of providing tariff concessions for specific goods, thereby facilitating trade by reducing customs duty. This instrument was introduced to streamline the process of applying for and granting tariff concessions for goods that are not produced in Australia and do not have substitutable alternatives, thus ensuring that importers are not disadvantaged by retrospective changes. The enacting body was the Chief Executive Officer of Customs, who is mandated under section 269F of the Act to consider applications for tariff concession orders if they meet the core criteria. The policy objective is to promote trade efficiency by providing lower customs duty rates on specified goods, thereby enhancing their affordability and competitiveness in the market. This legislative instrument ensures that the rights of importers are protected and that no new liabilities are imposed on any person as a result of the tariff concession.
Scope and Application
The Tariff Concession Instrument No. 0616925 is a legislative instrument made under the Customs Act 1901, which pertains specifically to the application of tariff concessions for certain goods imported into Australia. The instrument applies to the entity that applied for the concession, in this case, C-Cut Tools Pty Ltd, and more broadly to the goods identified in the application, namely certain holesaws. The Act allows for tariff concessions to be granted where the goods in question are not produced in Australia and no suitable substitute is manufactured domestically. The concession reduces the duty on these specific holesaws from 5% to 0%. This instrument, as with all made under the Customs Act 1901, operates within the Commonwealth jurisdiction and applies nationally across Australia. It is important to note that the instrument does not affect any pre-existing rights or liabilities of persons other than the Commonwealth, ensuring that no party is disadvantaged by the implementation of the concession post the date of registration. Furthermore, the instrument does not specify any exclusions or exemptions beyond the general criteria set out in the Customs Act 1901.
Key Provisions
The Tariff Concession Instrument No. 0616925, made under the Customs Act 1901 (the Act), pertains to a Tariff Concession Order (TCO) concerning certain holesaws. Section 269F of the Act allows for an application to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. This instrument was made in response to an application from C-Cut Tools Pty Ltd on 7 September 2006. The CEO, upon being satisfied that the application met the core criteria specified in section 269C, declared that the certain holesaws are subject to a 0% duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, as opposed to the general 5% rate. This was because no substitutable goods were produced in Australia, as defined by section 269D.
The Act imposes specific obligations on the CEO when considering a TCO application. As per section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not proceed. In this case, the CEO did not receive any submissions. Section 269P(3) further mandates that if the CEO is satisfied that the application meets the core criteria, they must issue a written TCO. These sections outline the process and criteria for the CEO when handling TCO applications.
Section 269SJ of the Act sets out goods that cannot be subject to a TCO, and the CEO must ensure that the application does not pertain to such goods. Failure to comply with these provisions could result in the TCO being invalid. Additionally, subsection 269S(1) specifies that the TCO comes into force on the date the application is lodged. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and it does not impose any liabilities on any person. This means that while the TCO benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO's effective date, it does not disadvantage or impose liabilities on other parties.