EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702147
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.
ING Real Estate SSOW Pty Ltd applied for a TCO in respect of certain observation wheel parts on 12 February 2007.
Instrument
TCO No 0702147 was made on 11 May 2007. It declares that those certain observation wheel 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. 0702147 is taken to have come into force on 12 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. 0702147 was enacted in 2007 under the Customs Act 1901 with the objective of addressing the need for tariff concessions on certain goods that are not produced in Australia, thereby encouraging their importation and supporting industries that rely on these goods. This instrument was created to provide a mechanism for the Chief Executive Officer of Customs to issue Tariff Concession Orders, which lower the rate of customs duty on specified goods. The instrument was introduced in response to an application by ING Real Estate SSOW Pty Ltd for tariff concessions on certain observation wheel parts, which were deemed to have no substitutable goods produced in Australia, thereby meeting the core criteria set out in section 269C of the Customs Act 1901. This legislative measure ensures that the rights of importers are not adversely affected and allows for potential refunds of duty paid on these goods since the date the Tariff Concession Order was deemed to have come into effect.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking to import goods that may be eligible for reduced customs duties if a TCO is granted. Such concessions are available for goods that are not specified in section 269SJ of the Act and meet the core criteria outlined in section 269C, which primarily entails the absence of substitutable goods produced in Australia at the time the application is made. The geographic reach of this legislation is national, as it applies across Australia and is enforced by the Commonwealth. The legislation further delineates that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities for actions taken prior to the order’s registration. Additionally, the Act allows for the extension or restriction of its application through subordinate instruments, facilitating the dynamic management of tariff concessions in line with economic and industrial needs.
Key Provisions
The Customs Act 1901 (the Act) allows for Tariff Concession Orders (TCOs) to be issued by the Chief Executive Officer of Customs (the CEO) under section 269F. If a person applies for a TCO for goods that are not excluded under section 269SJ, the CEO must determine whether the application meets the core criteria outlined in section 269C. Specifically, if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, the CEO must issue a written TCO. This TCO declares that the specified goods are subject to a prescribed tariff item, as stated in Schedule 4 to the Customs Tariff Act 1995. In the case of TCO No. 0702147, certain observation wheel parts are subject to item 50 of the Tariff, resulting in a free duty rate instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO must ensure that any TCO application not concerning restricted goods is assessed against the core criteria. If the criteria are met, the CEO must issue a TCO and publish a notice in the Gazette, inviting any interested parties to submit objections. In this instance, the CEO did not receive any submissions opposing the TCO. The TCO comes into force on the date the application was lodged, meaning that any rights of importers are protected, and no new liabilities are imposed retroactively.
Failure to comply with the Act’s provisions could result in legal consequences. The Act does not explicitly detail penalties for breaches, but general provisions under the Customs Act 1901 may apply. These could include fines or imprisonment for serious breaches, such as knowingly providing false information in an application. Additionally, any party who benefits unfairly from a TCO may be subject to civil action for any losses incurred due to the concession.