EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618405
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.
Abigroup Contractors Pty Ltd applied for a TCO in respect of certain reversible jet fans on 09 November 2006.
Instrument
TCO No 0618405 was made on 02 February 2007. It declares that those certain reversible jet fans 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. 0618405 is taken to have come into force on 09 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 was enacted by the Australian Parliament to provide a framework for the administration of customs and excise. The Act, as amended, includes provisions for the making of Tariff Concession Orders (TCOs) to reduce the customs duty on certain goods. Enacted to address the issue of facilitating trade by providing reduced tariff rates on specific goods, Tariff Concession Instrument No. 0618405 was introduced under the authority of the Customs Act 1901 to address the application by Abigroup Contractors Pty Ltd for tariff concessions on certain reversible jet fans. The policy objective behind this instrument is to ensure that goods which are not produced domestically, and for which there are no substitutable goods produced in Australia, benefit from reduced customs duties, thereby promoting economic efficiency and competitive pricing in the market.
Scope and Application
The Customs Act 1901, specifically Part XVA, enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCO) that apply lower rates of customs duty to certain goods. This Act applies to any person or entity seeking to import goods that are not specified as ineligible under section 269SJ. To be considered for a TCO, the applicant must demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. Once the CEO is satisfied that the application meets the core criteria, a TCO is issued, specifying the applicable tariff item under the Customs Tariff Act 1995. This legislative instrument extends across the Commonwealth of Australia and is not limited by state or territory boundaries. Notably, the TCO does not affect the rights of any person as at the date of registration and does not impose any new liabilities. The TCO, however, benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the order.
Key Provisions
The primary sections of the Customs Act 1901 that are relevant to Tariff Concession Orders (TCOs) include sections 269C, 269B, 269D, 269E, and 269P. Section 269C outlines the core criteria that an application must meet, primarily ensuring that no substitutable goods are produced in Australia at the time the application is lodged. Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods," which are crucial for determining eligibility for a TCO. Section 269P(3) mandates that if the application meets these criteria, the Chief Executive Officer of Customs (CEO) must issue a written order (a TCO) that declares the goods to which the concession applies.
The Act imposes specific obligations on applicants and the CEO. Applicants, such as Abigroup Contractors Pty Ltd, must ensure their applications are made in accordance with the Act and that they meet the core criteria specified in section 269C. The CEO has the duty to review applications and, if satisfied that the application meets the necessary criteria, issue a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties, as stipulated in subsection 269K(1). This publication is intended to allow any objections to be raised before the TCO is made.
In terms of penalties and consequences, the Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to TCOs. However, any failure to comply with the requirements of the Act or the TCO itself could potentially lead to general legal consequences, including civil actions for non-compliance or misrepresentation. The Act ensures that the TCO does not affect the rights of persons adversely and does not impose liabilities on persons other than the Commonwealth in respect of actions taken before the TCO's registration. Importers, however, may benefit from the TCO by applying for refunds of duty on goods imported since the TCO's effective date, as outlined in paragraph 126(1)(r) of the Regulations.