EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619948
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.
Alphapharm Pty Ltd applied for a TCO in respect of certain conical mills on 18 December 2006.
Instrument
TCO No 0619948 was made on 9 March 2007. It declares that those certain conical mills 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 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. 0619948 is taken to have come into force on 18 December 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, was amended to include Part XVA, establishing the Tariff Concession Orders (TCOs) scheme. This scheme allows for lower rates of customs duty on specific goods when certain criteria are met, addressing the gap in tariff regulation by providing a mechanism for tariff reductions on goods that are not produced domestically and have no substitutable goods available in Australia. The objective of this legislative instrument is to facilitate the application process for TCOs, thereby enhancing the efficiency and flexibility of customs duty regulation. The Customs Act 1901 aims to support Australian businesses by potentially lowering import costs for specific goods, which can contribute to a more competitive market environment. The explanatory statement for Tariff Concession Instrument No. 0619948 clarifies the application and implementation process for a TCO for certain conical mills, confirming that no submissions against the concession were received and that the concession will apply retroactively from the date the application was lodged.
Scope and Application
The Customs Act 1901, as detailed in Tariff Concession Instrument No. 0619948, outlines the process by which Tariff Concession Orders (TCOs) can be made, applying specifically to goods for which a lower rate of customs duty is sought. This legislation applies to any person or entity that can demonstrate that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. The scope of this Act is limited to the goods specified in the application and the criteria set forth in sections 269C, 269D, and 269E of the Act, which define terms such as "substitutable goods," "goods produced in Australia," and "ordinary course of business." The application of a TCO is subject to the conditions outlined in section 269SJ, which excludes certain goods from eligibility. The Act extends its reach across the Commonwealth of Australia and is enforced by the Chief Executive Officer of Customs. Any exclusions or exemptions are strictly defined within the Act itself, and the application of the Act may be further detailed through subordinate instruments, though these are not elaborated upon in the provided text.
Key Provisions
The Customs Act 1901, specifically Part XVA, outlines the procedure for Tariff Concession Orders (TCOs), as detailed in the Explanatory Statement for Tariff Concession Instrument No. 0619948. Under this scheme, the Chief Executive Officer of Customs (CEO) may issue a TCO for certain goods, which results in a lower rate of customs duty being applied to those goods (s 269F). An application for a TCO must not be in respect of goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO. The CEO must determine if the application meets the core criteria set out in section 269C of the Act.
To meet these criteria, the CEO must be satisfied that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). The definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F of the Act, respectively. If the CEO is satisfied that the application meets the core criteria, they must make a written TCO order (s 269P(3)). This order specifies the goods subject to the concession and the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to those goods.
The CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who believes there are reasons why the TCO should not be made (s 269K(1)). In the case of TCO No. 0619948, Alphapharm Pty Ltd applied for a TCO in respect of certain conical mills on 18 December 2006. The CEO made the TCO on 9 March 2007, declaring that these conical mills are subject to item 50 of Schedule 4 to the Tariff, as no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%, but the rate for the goods subject to the TCO is 0%. No submissions were received in response to the notice published in the Gazette.
The TCO No. 0619948 is taken to have come into force on 18 December 2006, the day the application for the TCO was lodged (s 269S(1)). Importantly, this TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, so as to disadvantage that person or impose liabilities in respect of anything done or omitted before the date of registration. Importers of the affected goods will be able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (s 126(1)(r) of the Regulations). Consequently, the TCO does not impose any liabilities on any person.