EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702858
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.
H.T. Engineering Pty Limited applied for a TCO in respect of certain rubber online condenser cleaning balls on 22 February 2007.
Instrument
TCO No 0702858 was made on 18 May 2007. It declares that those certain rubber online condenser cleaning balls 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 10%. 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. 0702858 is taken to have come into force on 22 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, established a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislative scheme aims to address the need for tariff reductions on specific imported goods, providing economic benefits to businesses and consumers by lowering the duty rates on certain products. In particular, TCOs apply to goods for which no substitutable products are produced domestically, ensuring that such concessions do not undermine local industries. The explanatory statement for Tariff Concession Instrument No. 0702858, issued on 18 May 2007, pertains to an application from H.T. Engineering Pty Limited for rubber online condenser cleaning balls, which were granted a tariff concession reducing the duty rate from 10% to free. The policy objective here is to facilitate smoother import processes and reduce costs for businesses importing these specific goods, thereby promoting trade efficiency and competitiveness.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking to apply for a TCO for goods not specified in section 269SJ, which outlines the goods ineligible for such concessions. The Act's jurisdictional reach is national, with the CEO’s decisions impacting all importers across Australia. The TCO scheme aims to reduce customs duty rates on specific goods, provided no substitutable goods are produced domestically. This concession does not affect existing rights or impose liabilities on anyone except the Commonwealth. The TCO's application is effective from the date of the application, and any refunds for duties paid prior to the concession becoming effective can be claimed by importers under the relevant regulations. The Act allows for further specification and restriction of the TCO application through subordinate instruments.
Key Provisions
The Customs Act 1901, under Part XVA, enables the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) that reduce the customs duty on certain goods. Section 269F allows a person to apply to the CEO for a TCO for goods not listed in section 269SJ, which are ineligible for concession. If the application is deemed valid, the CEO assesses whether it meets the core criteria outlined in section 269C. A TCO application satisfies these criteria if, on the application date, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the CEO is satisfied, they must issue a TCO, as per section 269P(3), specifying the applicable tariff item.
The obligations imposed by the Act on parties include the requirement for the CEO to publish a notice in the Gazette (subsection 269K(1)) inviting submissions on a TCO application. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO's effective date, as per section 269S(1). The TCO, once issued, confers benefits to importers who can apply for a refund of duty on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901 or the terms of a TCO can result in penalties. The exact penalties depend on the specific breach and could include fines or imprisonment for serious violations. The maximum penalties are not specified in the explanatory statement but would typically be outlined in the relevant sections of the Customs Act 1901 or related regulations. Non-compliance with the duty refund process under the TCO might also result in civil consequences, such as the denial of a refund or additional duties being owed.