EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618423
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.
Venus Hartung Proprietary Limited applied for a TCO in respect of certain self adhesive cloth tapes on 10 November 2006.
Instrument
TCO No 0618423 was made on 02 February 2007. It declares that those certain self adhesive cloth tapes 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 7.5%. 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. 0618423 is taken to have come into force on 10 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, provides a framework for administering customs and excise, including the mechanism for granting tariff concessions through Tariff Concession Orders (TCOs). The Act was designed to streamline the process of applying for tariff reductions on imported goods, facilitating trade and economic efficiency by ensuring that Australian consumers and businesses have access to competitively priced imported goods. This was introduced to address the need for a more efficient and responsive system for tariff concessions, ensuring that the Australian market can adapt to changes in global trade conditions. The process outlined in the Act allows the Chief Executive Officer of Customs to assess and approve applications for tariff concessions, provided that the goods in question are not substitutable by domestically produced alternatives. This mechanism aims to enhance Australia’s trade competitiveness while protecting domestic industries where necessary.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the application of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs, which provide for a lower rate of customs duty on specified goods. The application process requires the applicant to demonstrate that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO, and that no substitutable goods were produced in Australia on the date of application. Once the core criteria are satisfied, the CEO issues a TCO, as seen with Venus Hartung Proprietary Limited’s application for certain self adhesive cloth tapes, which was granted on 2 February 2007. This order effectively reduced the duty rate for these tapes from 7.5% to free. The process also includes a requirement for the CEO to invite submissions from interested parties, although no submissions were received for this particular order. The TCO applies retroactively to the date of application, providing benefits to importers by allowing them to apply for duty refunds for goods imported since the effective date of the concession. The legislation ensures that no person, other than the Commonwealth, is disadvantaged or imposed liabilities retroactively by the concession.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0618423, under the Customs Act 1901, establish the framework for tariff concessions on specific goods, in this case self adhesive cloth tapes. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria, as outlined in section 269C, they are required to make a written order (section 269P(3)). The instrument specifies that these tapes are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, thereby granting them a concession that reduces their duty rate from 7.5% to free.
The Act imposes several obligations on parties applying for a TCO. Firstly, applicants must ensure that their application is not for goods specified in section 269SJ, which are ineligible for tariff concessions. Secondly, applicants must demonstrate that on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. This involves a careful assessment of what constitutes 'substitutable goods' as defined by section 269D and 'ordinary course of business' as defined by section 269E. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties if they accept an application as valid, as per section 269K(1).
In terms of consequences for breach, the Customs Act 1901 does not explicitly state specific offences or penalties related to the application or misuse of TCOs. However, any improper application or fraudulent claims related to tariff concessions could potentially involve broader legal consequences under other relevant sections of the Act. The Act does ensure that the rights of importers are beneficially affected, and they may apply for a refund of duty on goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person in respect of actions taken prior to the date of registration, safeguarding existing rights and obligations.