EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618516
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.
Road Gear Australasia Pty Ltd applied for a TCO in respect of certain rubber matting on 14 November 2006.
Instrument
TCO No 0618516 was made on 2 February 2007. It declares that those certain rubber matting 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 10%. 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. 0618516 is taken to have come into force on 14 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 Parliament of Australia, provides a framework for the administration of customs duties and the regulation of imports and exports. One of the key mechanisms within this framework is the provision for Tariff Concession Orders (TCOs), which allow for the reduction or elimination of customs duty on specified goods. This mechanism was introduced to address the need for flexibility in customs duty rates to support certain economic activities, particularly in cases where no substitutable goods are produced domestically. Instrument No. 0618516, made under the authority of the Customs Act, grants a tariff concession on certain rubber matting, reducing the duty rate from 10% to 0%, effective from 14 November 2006. This measure was introduced following an application by Road Gear Australasia Pty Ltd, and the concession was granted after a determination by the Chief Executive Officer of Customs that no substitutable goods were produced in Australia at the time of the application. The policy objective was to facilitate the importation of these goods without the imposition of customs duty, thereby potentially lowering costs for businesses and consumers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at granting lower rates of customs duty on certain goods. This Act applies to any person or entity seeking a tariff concession on imported goods, provided these goods are not listed in section 269SJ, which excludes certain items from tariff concessions. The Act applies across the Commonwealth of Australia and extends its reach to any goods subject to the Customs Tariff Act 1995. The application process requires that no substitutable goods are produced in Australia on the day the application is lodged, as outlined in section 269C, ensuring the concession is granted only when necessary. The instrument in question, TCO No. 0618516, pertains to certain rubber matting, which will now attract a duty rate of 0% instead of the general 10%. The TCO, which came into effect on the date of the application, does not affect existing rights or impose liabilities for actions taken prior to its registration.
Key Provisions
The primary operative sections of this legislation (sections 269C, 269B, 269E, 269P, 269K, and 269S) establish a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) under the Customs Act 1901. Section 269C specifies that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This criterion is further defined by sections 269B, which outlines the meaning of ‘goods produced in Australia,’ and 269E, which defines ‘ordinary course of business.’ If the CEO is satisfied that these criteria are met, they must make a written order (section 269P(3)) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The CEO must also publish a notice in the Gazette inviting submissions on the proposed TCO (section 269K(1)). A TCO is deemed to come into force on the day the application for the TCO was lodged (section 269S(1)).
The obligations and requirements imposed by the Act on the parties involved are primarily on the CEO. The CEO must assess whether an application meets the core criteria for a TCO, which includes ensuring that no substitutable goods were produced in Australia on the day the application was lodged. The CEO is also required to publish a notice in the Gazette inviting submissions on the proposed TCO and to make a written order if the application meets the core criteria. The obligations on the applicant, such as Road Gear Australasia Pty Ltd, are to ensure that their application meets the criteria set out in the Act and to provide any necessary information to the CEO. There are no specific obligations on the importers or other parties unless they choose to submit a response to the CEO's notice in the Gazette.
The legislation does not explicitly outline specific offences, penalties, or civil/criminal consequences for breach. However, the process of creating a TCO and the criteria for making such an order are strictly defined, suggesting that failure to comply with these provisions could result in the TCO being invalid or subject to legal challenge. The CEO’s decision-making process is also subject to scrutiny, and any failure to properly consider an application or to follow the statutory requirements could potentially lead to legal consequences for the CEO or the entity involved. Given the structured nature of the process, any significant deviation from the prescribed steps could result in the TCO being overturned or not being recognised as valid by the courts.