EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618381
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.
Onesteel Manufacturing Pty Ltd applied for a TCO in respect of certain injection dispensers on 8 November 2006.
Instrument
TCO No 0618381 was made on 19 January 2007. It declares that those certain injection dispensers 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. 0618381 is taken to have come into force on 8 November 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. 0618381, enacted in 2007 under the Customs Act 1901, addresses the need for tariff concessions on specific imported goods, thereby reducing the financial burden on businesses that rely on these imports. This legislation allows for the application of lower customs duties on goods specified in a Tariff Concession Order (TCO), provided certain conditions are met, such as the absence of substitutable goods produced in Australia. The policy objective of this instrument is to facilitate smoother trade by making certain imports more cost-effective, thus encouraging economic activity and potentially benefiting consumers through reduced prices. The instrument was introduced following an application by Onesteel Manufacturing Pty Ltd for tariff concessions on certain injection dispensers, which were deemed eligible as no equivalent goods were being produced locally. The Customs Act 1901, administered by the Parliament of Australia, underpins this initiative, aiming to provide targeted relief to industries in need of specific imported materials.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines a framework for the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). This instrument applies to individuals or entities seeking tariff concessions for goods that are not produced in Australia in the ordinary course of business and that do not correspond to goods specified in section 269SJ of the Act, which details the goods ineligible for a TCO. The instrument's jurisdiction spans the Commonwealth of Australia and operates within the parameters set by the Customs Act 1901 and the Customs Tariff Act 1995. The TCO, once made, applies to the goods specified in the order and reduces the duty rate from the general rate to the prescribed rate outlined in the Customs Tariff. In the case of Instrument No. 0618381, this involves certain injection dispensers with a general duty rate of 5% being reduced to 0%. The application process requires the CEO to publish a notice in the Gazette inviting submissions from interested parties, although no submissions were received in this case. The TCO is effective from the date the application was lodged, offering potential benefits to importers who may apply for duty refunds for goods imported since the effective date. Importantly, the TCO does not impose liabilities or affect the rights of any person, other than the Commonwealth, in relation to actions taken prior to the TCO's registration.
Key Provisions
The main operative sections of the Customs Act 1901, specifically under Part XVA, allow for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (sections 269C, 269F, 269P). These orders enable a lower rate of customs duty on certain goods, provided the application meets specific criteria. An applicant may apply for a TCO under section 269F, and the CEO is required to assess the application against the core criteria specified in section 269C. If these criteria are met, the CEO must make a written order declaring the goods to which the TCO applies (section 269P(3)). This process was followed in the case of TCO No. 0618381, where certain injection dispensers were granted a 0% duty rate instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO must ensure that any application for a TCO does not pertain to goods specified in section 269SJ, which cannot be subject to a TCO. The CEO is also mandated to publish a notice in the Gazette inviting submissions from any person who may have reasons against the making of the TCO (subsection 269K(1)). Once the application is accepted as valid, the TCO is taken to have come into force on the day the application was lodged (subsection 269S(1)). In this case, TCO No. 0618381 was effective from 8 November 2006, the date the application was made.
The Act does not detail specific offences, penalties, or consequences for breaches related to the making of a TCO. However, it ensures that the TCO does not affect the rights of persons (other than the Commonwealth) as at the date of registration in a way that disadvantages them or imposes liabilities for actions taken before the registration date. Importers will benefit from the TCO as they can apply for a refund of duty on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations). The TCO itself does not impose any liabilities on any person.