EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619085
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.
Trojan Transport Spares (Aust) Pty Ltd applied for a TCO in respect of certain reinforced rubber hose on 29 November 2006.
Instrument
TCO No 0619085 was made on 02 March 2007. It declares that those certain reinforced rubber hoses 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. 0619085 is taken to have come into force on 29 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 Commonwealth Parliament, provides a framework for the administration of customs and excise duties in Australia. Among its provisions, Part XVA facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders grant reduced customs duty rates on specified goods, provided certain criteria are met. The purpose of Tariff Concession Instrument No. 0619085, made in 2007, is to address the specific need for tariff concessions on certain reinforced rubber hoses, as requested by Trojan Transport Spares (Aust) Pty Ltd. By applying a zero percent duty rate on these hoses, the instrument aims to provide economic benefits to importers, without imposing any liabilities or disadvantaging other parties. The instrument came into effect on the date of the application, 29 November 2006, and followed the required consultation process, which did not elicit any objections.
Scope and Application
The Tariff Concession Instrument No. 0619085 under the Customs Act 1901 applies to goods specified in the instrument, namely certain reinforced rubber hoses, which have been granted a tariff concession order by the Chief Executive Officer of Customs. This act specifically benefits entities that import these goods by allowing them to apply for a refund of duty on goods imported since the day the concession order was taken to have come into force. The geographic reach of this act is national, as it operates under the Commonwealth jurisdiction and applies to all states and territories of Australia. The act does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person. The CEO must ensure that the application for a tariff concession meets the core criteria, which include verifying that no substitutable goods are produced in Australia in the ordinary course of business. Any exclusions or exemptions are strictly outlined in the Customs Act 1901, and the application of the act may be extended or restricted through subordinate instruments.
Key Provisions
The main operative sections of the Customs Act 1901, as referenced in the Tariff Concession Instrument No. 0619085, establish a framework for Tariff Concession Orders (TCOs). Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO on certain goods. If the application is deemed valid, the CEO must determine whether it meets the core criteria outlined in sections 269C and 269B, which involve ensuring that no substitutable goods are produced in Australia at the time of the application (section 269C) and that the terms 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' are properly defined (section 269B). If these criteria are met, the CEO must issue a written TCO as per section 269P(3), declaring the specified goods to which a particular rate of duty applies.
The Act imposes certain obligations on the parties involved, primarily the applicant and the CEO. For the applicant, the obligation lies in ensuring that the application for a TCO is made in good faith and that it is supported by sufficient evidence to meet the core criteria. The CEO, on the other hand, has the responsibility of verifying the application against the stipulated criteria and making a decision based on the evidence provided. Furthermore, the CEO must publish a notice in the Gazette inviting any person who might object to the making of the TCO to submit their concerns, as required by section 269K(1).
Failure to comply with the provisions of the Customs Act 1901 can result in various consequences. If a TCO is issued improperly, there could be civil or administrative penalties for misrepresentation or fraud in the application process. However, the explanatory statement does not specify exact penalties, only that the TCO does not impose any liabilities on any person and does not affect the rights of a person as at the date of registration. Importers who benefit from a TCO may be able to 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.