EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0620224
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.
GMCAT Pty Ltd applied for a TCO in respect of certain belt and disk sanders on 28 December 2006.
Instrument
TCO No 0620224 was made on 16 March 2007. It declares that those certain belt and disk sanders 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. 0620224 is taken to have come into force on 28 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 Tariff Concession Instrument No. 0620224 was enacted under the Customs Act 1901, addressing a gap in tariff concessions for specific imported goods. The Act provides a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs, effectively reducing customs duties on specified goods. This legislative instrument was introduced to facilitate the import of certain belt and disk sanders by GMCAT Pty Ltd, ensuring these goods attract a free rate of duty rather than the general rate of 5%. The instrument was made on 16 March 2007, following a valid application submitted by GMCAT Pty Ltd on 28 December 2006, and came into effect on the date of the application. The policy objective behind this legislation is to encourage the importation of goods that are not produced domestically, thereby benefiting importers and potentially lowering consumer prices for these items.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity that seeks to import goods into Australia and qualifies for a tariff concession, provided the goods are not explicitly excluded by section 269SJ of the Act. The geographic scope of the Act is national, applying across all jurisdictions within Australia. A TCO can be applied for under section 269F, but the application must meet the core criteria set out in sections 269C, 269B, and 269D of the Act, particularly ensuring no substitutable goods are produced in Australia. The application process involves a public notification, inviting submissions from interested parties, as mandated by section 269K(1) of the Act. A notable case is TCO No. 0620224, which was issued on 16 March 2007 for certain belt and disk sanders, effectively reducing the duty rate from 5% to free, effective from 28 December 2006. This instrument does not retroactively affect the rights of any party except the Commonwealth and does not impose new liabilities, although it does entitle importers to duty refunds for qualifying goods imported post the effective date.
Key Provisions
The main operative sections of the Customs Act 1901 (section 269F) allow for the application for a Tariff Concession Order (TCO) by a person to the Chief Executive Officer (CEO) of Customs. If the CEO determines that the application is valid and meets the core criteria, they must issue a TCO. This is outlined in section 269C, which states that a TCO application meets the core criteria if no substitutable goods were produced in Australia at the time of the application. Additionally, section 269P(3) mandates that a written TCO be made if the application satisfies these criteria.
The Customs Act 1901 imposes several obligations on the CEO. First, under section 269F, the CEO must consider applications for a TCO, ensuring they are not for goods specified in section 269SJ, which are ineligible for a TCO. Section 269C requires the CEO to verify that the application meets the core criteria by confirming that no substitutable goods were produced in Australia at the time of the application. Moreover, subsection 269K(1) mandates that the CEO publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made.
There are potential consequences for breaches of the Customs Act 1901. While the explanatory statement does not explicitly state any offences or penalties, it is implicit that failure to comply with the requirements for a TCO could result in the TCO being invalid or subject to legal challenge. Such breaches might lead to disputes over the legitimacy of the TCO or the rights of importers, although specific penalties are not outlined in the text provided.