EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618521
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.
Halifax Vogel Group Pty Ltd applied for a TCO in respect of certain artificial stone tiles on 14 November 2006.
Instrument
TCO No 0618521 was made on 02 February 2007. It declares that those certain artificial stone tiles 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. 0618521 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 Australian Parliament, established a framework for the imposition of customs duties on imported goods. Among its provisions, Part XVA introduced the concept of Tariff Concession Orders (TCOs), which can reduce the duty payable on certain goods, provided that no substitutable goods are produced in Australia. The policy objective is to encourage the import of goods that are not domestically manufactured, thereby potentially reducing costs for consumers and businesses. F2007L00394 is a Tariff Concession Instrument that was introduced to address a specific application by Halifax Vogel Group Pty Ltd for a concession on certain artificial stone tiles. This instrument was enacted to provide a zero-rate duty on these tiles, effective from the date the application was lodged, and aimed to ensure that no domestic producer was disadvantaged by this concession.
Scope and Application
The Customs Act 1901, through its Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). This scheme allows for a lower rate of customs duty on goods specified in a TCO. Applications for TCOs are considered by the CEO, who must ensure that the goods in question are not specified in section 269SJ of the Act, which lists those goods ineligible for TCO. The core criteria for approving an application, as stipulated in section 269C, require that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. The Act further defines terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" in sections 269D, 269E, and 269F respectively. Upon meeting these criteria, the CEO is mandated to issue a TCO, as per section 269P(3), effectively applying a prescribed tariff rate from the Customs Tariff Act 1995 to the specified goods. The TCO, once made, does not retroactively disadvantage any person or impose new liabilities for actions taken prior to its issuance. Importers of the affected goods can benefit by applying for a refund of duties paid on imports since the effective date of the TCO. The geographic reach of this legislation is national, applying throughout the Commonwealth of Australia, with no exclusions or exemptions specified for the particular TCO beyond those outlined in the Act.
Key Provisions
The primary operative sections of the Customs Act 1901, specifically under Part XVA, focus on the process and criteria for Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided the goods do not fall under the prohibited list in section 269SJ. The CEO must then determine whether the application meets the core criteria outlined in section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269D). If the application satisfies these criteria, the CEO must make a written order, as stipulated in section 269P(3), declaring the goods subject to the TCO.
Under this legislation, the obligations imposed on the parties involved are quite specific. The CEO of Customs has the responsibility to assess whether an application for a TCO meets the core criteria and, if satisfied, to make a formal order. This process includes publishing a notice in the Gazette (subsection 269K(1)), inviting any interested party to submit their views on the application. Importers, once the TCO is in effect, have the right to apply for a refund of duty on goods imported since the date the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations.
The Act does not impose any penalties or civil or criminal consequences for breaching the terms of a TCO. However, it is important to note that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO as of the date of registration, nor are any liabilities imposed in respect of actions taken before the registration date. This ensures that the implementation of a TCO does not disadvantage existing parties or create new liabilities for them.