EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701570
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.
Surteco Australia Pty Limited applied for a TCO in respect of certain edge banding rolls on 29 January 2007.
Instrument
TCO No 0701570 was made on 20 April 2007. It declares that those certain edge banding rolls 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. 0701570 is taken to have come into force on 29 January 2007.
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, provides a framework for the administration of customs duties and the regulation of imported goods. One of the mechanisms under this Act is the Tariff Concession Order (TCO) scheme, which allows for reduced customs duty rates on certain goods. The purpose of this scheme is to promote economic efficiency by facilitating the importation of goods that are not produced domestically or for which there are no suitable substitutes. TCO No. 0701570, introduced under this framework, was designed to provide tariff concessions on certain edge banding rolls, with the general aim of supporting specific industries by lowering their input costs. The instrument was implemented to ensure that the application of the concession does not negatively impact existing rights or impose new liabilities on any party except the Commonwealth, while also allowing for the potential refund of duties paid on these goods prior to the concession's effective date.
Scope and Application
The Tariff Concession Instrument No. 0701570, pursuant to the Customs Act 1901, applies to certain edge banding rolls for which Surteco Australia Pty Limited applied for a Tariff Concession Order (TCO). The Act facilitates the application process for tariff concessions, allowing the Chief Executive Officer of Customs (CEO) to grant lower rates of customs duty on specified goods, provided they meet the criteria outlined in the Act. The TCO applies to the named goods and takes effect from the date the application was lodged, which in this case was 29 January 2007. The geographic and jurisdictional reach of this Act is national, operating under the Commonwealth of Australia. The Act excludes goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The application of the Act can be extended or restricted through subordinate instruments, although this specific TCO does not affect the rights of any person adversely or impose any liabilities. Importers of the affected goods will benefit from this concession and may apply for a refund of duty paid on imports from the effective date of the TCO.
Key Provisions
The Customs Act 1901 (the Act) provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (the CEO). The Act, specifically Part XVA, details the procedure for TCOs, which apply reduced rates of customs duty to specified goods. Section 269F of the Act allows any person to apply to the CEO for a TCO in relation to goods. The CEO must then assess whether the application complies with the core criteria outlined in section 269C, which mandates that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B further clarifies that "goods produced in Australia", "ordinary course of business", and "substitutable goods" are defined by sections 269D, 269E, and 269F respectively. If the CEO determines that the application meets these criteria, they are required, under section 269P(3) of the Act, to issue a written order, which constitutes the TCO.
The obligations imposed by the Act on the parties involved are quite straightforward. Firstly, the applicant must ensure that their application is in respect of goods not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO, on receiving a valid application, must assess whether it meets the core criteria and, if satisfied, issue a TCO. Additionally, the CEO is obligated to publish a notice in the Gazette inviting any interested parties to lodge submissions against the proposed TCO. Failure to meet these obligations can result in legal consequences.
The Act imposes certain consequences for non-compliance with its provisions. However, in this specific case, no submissions were received by the CEO in response to the published notice, indicating broad acceptance of the TCO. The TCO itself does not affect the rights of any person, except the Commonwealth, as at the date of registration, so as to disadvantage that person or impose liabilities for actions taken before the registration date. Importers, however, will benefit as they can apply for a refund of duty on goods imported since the effective date of the TCO, under paragraph 126(1)(r) of the Regulations. The Act ensures that no new liabilities are imposed on any person as a result of the TCO.