EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618568
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.
Super Cheap Auto Pty Ltd applied for a TCO in respect of certain motor vehicle window sunshades on 16 November 2006.
Instrument
TCO No 0618568 was made on 09 February 2007. It declares that those certain motor vehicle window sunshades 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. 0618568 is taken to have come into force on 16 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 Tariff Concession Instrument No. 0618568 was enacted in 2007 as part of the Customs Act 1901 to address the problem of providing tariff concessions for specific goods. This instrument was developed in response to an application from Super Cheap Auto Pty Ltd for tariff concessions on certain motor vehicle window sunshades, which were not being produced in Australia and therefore met the core criteria for such concessions. The Tariff Concession Orders (TCO) scheme, under which this instrument operates, allows the Chief Executive Officer of Customs to reduce the rate of customs duty on goods that meet specific criteria, provided they are not specified in section 269SJ of the Act. The policy objective of this legislation is to facilitate trade by ensuring that Australian consumers and businesses have access to competitively priced goods that are not produced domestically.
The instrument was enacted by the relevant legislature, which in this case is the Parliament of Australia, to ensure that the rights of importers are beneficially affected and that no person is disadvantaged or imposed liabilities due to the tariff concessions. This was achieved by taking the TCO to have come into force on the day the application was lodged, in this case, 16 November 2006. The Customs Act 1901 provides the legislative framework for this instrument, ensuring that any person, other than the Commonwealth, is not adversely affected by the concessions.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These orders allow for a lower rate of customs duty on goods specified in the TCO. The Act applies to any person or entity that seeks a concession on customs duties for goods imported into Australia. The geographic reach of the Act is national, applying across the Commonwealth of Australia, and its application is not limited to particular industries or types of transactions, but rather to the specific goods that are the subject of a TCO application. The Act excludes certain goods from being subject to a TCO as specified in section 269SJ, and a TCO application is only valid if it meets the core criteria outlined in section 269C of the Act. The CEO may extend or restrict the application of a TCO through subordinate instruments, although this is not mentioned in the provided explanatory statement.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a framework for Tariff Concession Orders (TCOs), as outlined in section 269F. Any person can apply to the Chief Executive Officer of Customs (CEO) for a TCO on certain goods. If the CEO determines that the application is not in respect of goods specified in section 269SJ and meets the core criteria in section 269C, a TCO can be issued. This means that if, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business, a TCO can be made.
The CEO must then issue a written order, as per section 269P(3), declaring that the goods subject to the TCO application are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. For example, in the case of TCO No 0618568, the CEO determined that no substitutable goods were produced in Australia for certain motor vehicle window sunshades, and thus, these goods were subject to a free rate of duty instead of the general 5% rate.
Obligations under the Act include the CEO's responsibility to publish a notice in the Gazette after accepting a TCO application, inviting submissions from any person who believes the TCO should not be made, as per subsection 269K(1). In this instance, no submissions were received. Once the TCO is made, it is effective from the date the application was lodged, as per subsection 269S(1). The rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
The Act does not impose any liabilities on any person and does not disadvantage anyone other than the Commonwealth. The Tariff Concession Instrument No. 0618568, which relates to certain motor vehicle window sunshades, is a practical application of these provisions, demonstrating how the legislative framework can provide tariff concessions to specific goods.