EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618382
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 dispenser valves on 8 November 2006.
Instrument
TCO No 0618382 was made on 19 January 2007. It declares that those certain injection dispenser valves 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. 0618382 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 Customs Act 1901, enacted by the Australian Parliament, established a framework for the administration of customs duties and tariffs. Specifically, Part XVA of the Act provides for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislative instrument was introduced to address the need for concessionary tariffs for certain goods under particular circumstances. The policy objective is to ensure that a lower rate of customs duty applies to goods that are subject to a TCO, thereby incentivising the importation of specific goods that are not produced domestically or are not readily substitutable by locally produced goods. As per the Act, an applicant may seek a TCO if the goods in question are not specified as ineligible in section 269SJ, and the CEO must determine whether the application meets the core criteria outlined in section 269C. In the case of Onesteel Manufacturing Pty Ltd's application for a TCO concerning certain injection dispenser valves, the CEO was satisfied that no substitutable goods were produced in Australia, leading to the issuance of TCO No. 0618382 on 19 January 2007, which applied a zero per cent duty rate to these goods.
Scope and Application
The Tariff Concession Instrument No. 0618382 under the Customs Act 1901 applies to any entity or individual seeking tariff concessions for specific goods, in this case, injection dispenser valves, where no substitutable goods are produced in Australia. The Act allows the Chief Executive Officer of Customs to grant tariff concessions if certain criteria are met, specifically if no substitutable goods are produced domestically. The application process involves submitting an application to the CEO, who then assesses whether the application meets the core criteria, including the absence of substitutable goods in Australia. This legislation extends to the Commonwealth and is intended to benefit importers by reducing the customs duty rate for specified goods, in this instance from 5% to 0%. The geographical reach of this Act is nationwide, affecting all entities involved in importing the specified goods. The Act does not impose liabilities on any person and does not affect any existing rights adversely as of the registration date of the tariff concession order.
Key Provisions
The primary operative sections of the Customs Act 1901, specifically concerning Tariff Concession Orders (TCOs), include sections 269C, 269F, 269P, and 269SJ. Section 269F allows for the application to the Chief Executive Officer of Customs (CEO) for a TCO, which must meet certain criteria set out in section 269C. If the CEO is satisfied that the application meets these criteria, they must issue a written order as stipulated in section 269P. Notably, section 269SJ outlines goods that are ineligible for TCOs.
The Act imposes specific obligations on the CEO when handling TCO applications. Upon receiving a valid application, the CEO must determine whether it meets the core criteria, as outlined in section 269C. This involves verifying that no substitutable goods are produced in Australia on the day the application is lodged. Additionally, under section 269K, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit their views on the application. The CEO must also ensure that the rights of any person, other than the Commonwealth, are not adversely affected by the TCO.
In terms of breaches and consequences, the Act does not explicitly detail specific offences or penalties for failing to comply with the provisions regarding TCOs. However, any failure to adhere to the criteria for issuing a TCO or to follow the procedural requirements, such as the publication of notices in the Gazette, could potentially result in legal challenges or administrative penalties. The Act ensures that the rights of importers are protected and that they can apply for duty refunds as per the regulations, which underscores the importance of following the prescribed procedures.
The issuance of TCO No. 0618382, which applies a 0% duty rate to certain injection dispenser valves, exemplifies the application of these provisions. The CEO's decision to issue this TCO followed a valid application and an absence of any submissions opposing the concession. The TCO, effective from 8 November 2006, benefits importers by reducing their duty liability without imposing any new liabilities on other parties. This orderly process highlights the balance between facilitating trade and ensuring compliance with legislative requirements.