EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701868
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.
Hydro Aluminium Kurri Kurri Pty Ltd applied for a TCO in respect of certain baking furnace firing system parts on 05 February 2007.
Instrument
TCO No 0701868 was made on 01 May 2007. It declares that those certain baking furnace firing system parts 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. 0701868 is taken to have come into force on 05 February 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 Tariff Concession Instrument No. 0701868, enacted in 2007, is a measure under the Customs Act 1901 designed to address the problem of high customs duty rates on certain imported goods by providing tariff concessions. This legislation allows the Chief Executive Officer of Customs to grant tariff concession orders to reduce or eliminate customs duty on specific goods, provided they meet the core criteria and are not subject to restrictions outlined in the Act. The policy objective is to facilitate the importation of goods that are not produced domestically or are not substitutable with Australian-made alternatives, thereby potentially lowering costs for businesses and consumers. This instrument was created in response to an application from Hydro Aluminium Kurri Kurri Pty Ltd for tariff concessions on certain baking furnace firing system parts, which was subsequently approved by the CEO, resulting in a reduction of duty rates from 5% to free. The instrument's implementation did not disadvantage any existing rights or impose new liabilities on individuals or entities, except for potentially benefiting importers who can now seek duty refunds for goods imported since the effective date of the concession.
Scope and Application
The Customs Act 1901 applies to the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, as outlined in Part XVA of the Act. This legislation enables the reduction of customs duty rates on specified goods, provided certain criteria are met. Applications for TCOs can be submitted by any person, and once accepted, the CEO must consider whether the application meets the core criteria, such as the absence of substitutable goods produced in Australia. If the application is approved, a TCO is issued, granting a lower rate of duty for the specified goods. The geographic reach of this legislation is national, as it applies across Australia and is governed by Commonwealth law. Notably, the Act excludes certain goods from being subject to a TCO, as outlined in section 269SJ. The application of the Act may be extended or modified through subordinate instruments, allowing for the flexibility to adapt to specific circumstances or evolving economic conditions.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, and 269P of the Customs Act 1901, which establish the criteria and process for making Tariff Concession Orders (TCOs) (s 269C, s 269F, s 269P). Under section 269F, any person can apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. If the CEO determines that the application is valid and meets the core criteria outlined in section 269C, they are required to make a written order, the TCO, declaring that the goods in question are subject to a prescribed tariff concession (s 269P(3)). The CEO must also consider whether any substitutable goods are produced in Australia in the ordinary course of business. If none are, the application meets the core criteria and a TCO is made.
The Act imposes several obligations on the parties involved. Firstly, the CEO is mandated to review TCO applications and decide if they meet the core criteria (s 269C, s 269F, s 269P). If the CEO is satisfied that the application meets the criteria and no substitutable goods are produced in Australia, they must make a TCO (s 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO, although no submissions were received in this case (s 269K(1)). Additionally, the CEO must ensure that the TCO does not disadvantage any person, other than the Commonwealth, in relation to actions taken before the TCO was registered (s 126(1)(r) of the Regulations).
There are no explicit offences, penalties, or consequences for breach specified within the text of this legislation. However, the Act does provide that a TCO does not impose any liabilities on any person (s 269S(1)). The rights of importers are beneficially affected, as they can 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). The TCO itself ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the concession, and no liabilities are imposed retroactively. This underscores the legislative intent to provide tariff concessions without imposing undue burdens or liabilities on affected parties.