EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704152
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.
G James Australia Pty Ltd applied for a TCO in respect of certain insulated glass production sealing robots on 15 March 2007.
Instrument
TCO No 0704152 was made on 08 June 2007. It declares that those certain insulated glass production sealing robots 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. 0704152 is taken to have come into force on 15 March 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, establishes a framework under which Tariff Concession Orders (TCOs) can be made to provide reduced rates of customs duty on specified goods. The primary gap this legislation aims to fill is the need to facilitate the import of goods that are not produced domestically, thereby aiding businesses by reducing costs and potentially enhancing their competitiveness. The Tariff Concession Instrument No. 0704152, issued in 2007, exemplifies this process by granting tariff concessions on certain insulated glass production sealing robots, which were deemed not to have substitutable goods produced in Australia at the time of the application. The policy objective, as outlined in the Act, is to ensure that such concessions are granted only when there is no domestic production of substitutable goods, thus supporting industries where local alternatives do not exist.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0704152, pertains to the regulation of customs duty on certain imported goods, specifically targeting insulated glass production sealing robots. This legislation applies to individuals and entities seeking tariff concessions on specified goods. The Act enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that reduce or eliminate customs duty on goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this Act is national, as it applies across all jurisdictions within Australia. Notably, the Act excludes certain goods from tariff concession applications, as delineated in section 269SJ, and the CEO has the discretion to accept or reject applications based on whether they meet the core criteria outlined in sections 269C, 269B, 269D, and 269E of the Act. The TCO No. 0704152, effective from 15 March 2007, grants a free duty rate for the specified robots, down from the general rate of 5%, and does not impose any liabilities or disadvantage existing rights of persons other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0704152, made under the Customs Act 1901 (section 269F), provides a detailed procedure for the Chief Executive Officer of Customs (the CEO) to consider and approve Tariff Concession Orders (TCOs). This instrument, published on 8 June 2007, specifically applies to certain insulated glass production sealing robots. The primary operative sections (sections 269C and 269P(3)) require that the CEO must determine if the application for a TCO meets the core criteria, which includes assessing whether substitutable goods are produced in Australia. If the CEO is satisfied that no substitutable goods are produced in Australia, they must issue a written TCO.
The obligations imposed by the Customs Act 1901 on parties applying for a TCO are significant. The applicant must ensure their application meets the core criteria as outlined in section 269C. This involves proving that no substitutable goods, as defined in section 269D, are produced in Australia in the ordinary course of business. Additionally, section 269K(1) mandates that the CEO publish a notice in the Gazette inviting any interested parties to submit their views on the proposed TCO. The CEO must consider any submissions received before making a decision. The Act also stipulates that a TCO is deemed to have come into force on the date the application was lodged (subsection 269S(1)), which, in this case, was 15 March 2007.
The Customs Act 1901 does not explicitly detail offences, penalties, or civil/criminal consequences for breaches related to TCOs. However, any failure to comply with the obligations and requirements set out in the Act could potentially lead to legal challenges or administrative penalties imposed by the CEO. The Act ensures that the rights of importers will be beneficially affected by a TCO, such as the ability to apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations). Additionally, the Act explicitly states that a TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, nor does it impose any liabilities on any person (subsection 269S(1)).