EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701942
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.
Placard Pty Ltd applied for a TCO in respect of certain punching and die cutting machines on 7 February 2007.
Instrument
TCO No 0701942 was made on 30 April 2007. It declares that those certain punching and die cutting machines 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. 0701942 is taken to have come into force on 7 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 Customs Act 1901, enacted by the Australian Parliament, provides for a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The Act aims to facilitate trade by allowing reduced customs duties on certain imported goods, provided they meet specific criteria. This legislation was introduced to address the need for flexibility in customs duties to support Australian industries that do not domestically produce certain goods, ensuring these industries remain competitive. Placard Pty Ltd's application for a TCO for punching and die cutting machines, granted in 2007, exemplifies this process. The TCO, effective from the date of application, resulted in a duty reduction from 5% to 0% for these machines, aligning with the Act's policy objective to promote fair trade practices and support industry competitiveness.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0701942, applies to any individual or entity seeking tariff concessions for goods imported into Australia. The Act pertains specifically to those goods which are subject to a Tariff Concession Order (TCO), providing a lower rate of customs duty as outlined in Schedule 4 of the Customs Tariff Act 1995. This legislation is relevant to industries and businesses that import specified goods, allowing them to benefit from reduced customs duties if they meet the criteria set out in the Act. The application of this legislation is national in scope, as it is administered under the authority of the Commonwealth. It is important to note that the Act does not apply to goods specified in section 269SJ of the Customs Act, which are ineligible for tariff concessions. The instrument may be further extended or restricted through subordinate instruments, allowing for the ongoing management and adjustment of the tariff concession scheme as necessary.
Key Provisions
The Customs Act 1901 (the Act) contains provisions that allow for the establishment of Tariff Concession Orders (TCOs) through Part XVA. Section 269F of the Act allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, with the aim of obtaining a lower rate of customs duty. The CEO must determine if the application meets the core criteria, which includes assessing whether no substitutable goods were produced in Australia on the day the application was lodged (section 269C). If the CEO is satisfied that the application meets these criteria, they must issue a written order that declares the goods to which the TCO applies (section 269P(3)).
The obligations imposed by the Act on parties applying for a TCO include ensuring that the goods in question are not specified in section 269SJ, which outlines those goods that cannot be subject to a TCO. The CEO is obligated to publish a notice in the Gazette inviting submissions from interested parties if they consider there are reasons why the TCO should not be made (subsection 269K(1)). The CEO must also ensure that the TCO does not affect the rights of a person as at the date of registration, so as to disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)).
In terms of consequences for breaches, the Act does not specify offences or penalties for failing to comply with the requirements for a TCO. However, any person adversely affected by the making of a TCO may seek a review of the decision under section 270A of the Act. The Act ensures that the rights of importers are beneficially affected by providing the opportunity to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).