EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704648
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.
Sun Metals Corporation Pty Ltd applied for a TCO in respect of certain gas blower shell and tube oil coolers on 28 March 2007.
Instrument
TCO No 0704648 was made on 15 June 2007. It declares that those certain gas blower shell and tube oil coolers 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. 0704648 is taken to have come into force on 28 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 Parliament of Australia, establishes a framework for the imposition of customs duties on goods imported into Australia. Part XVA of the Act facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce the rate of customs duty on specific goods if certain conditions are met. This legislative instrument aims to address the issue of high customs duties on imported goods that have no local substitutes, thereby supporting businesses that rely on importing these specific goods for their operations. The policy objective is to encourage trade and economic efficiency by making certain imported goods more affordable, which can help businesses compete more effectively in the domestic market. The Tariff Concession Instrument No. 0704648, made in 2007, exemplifies this process by granting a tariff concession on certain gas blower shell and tube oil coolers, reducing their duty rate from 5% to free.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any person or entity seeking to import goods that are subject to a TCO, which provides a lower rate of customs duty. The Act’s application extends to all entities within the Commonwealth of Australia, ensuring that the rules and criteria for TCOs are uniformly enforced. Section 269SJ of the Act excludes certain goods from being subject to a TCO, such as those specified therein. The scope of the Act is further defined by sections 269C, 269B, and 269D, which outline the core criteria for TCO applications, including the condition that no substitutable goods are produced in Australia in the ordinary course of business. This means that if the CEO determines that a TCO application meets the specified criteria, they are mandated to issue a written order, thereby granting the tariff concession. The Tariff Concession Instrument No. 0704648, for instance, was issued following an application by Sun Metals Corporation Pty Ltd for certain gas blower shell and tube oil coolers, resulting in a duty-free concession on these goods. The Act’s application is procedurally governed by the necessity for the CEO to publish notices of valid TCO applications in the Gazette, inviting submissions from any interested parties, although no submissions were received in this instance. The commencement of a TCO is effective from the date the application is lodged, ensuring that any rights of importers are preserved and potentially beneficially affected, as they may apply for refunds on duties paid prior to the TCO’s effective date.
Key Provisions
The Customs Act 1901 (the Act) provides a framework for Tariff Concession Orders (TCOs) which can be made by the Chief Executive Officer of Customs (the CEO) under section 269F. When an application is made for a TCO, section 269C requires the CEO to assess whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269P(3)). The CEO must also ensure the application is not in respect of goods specified in section 269SJ of the Act, which cannot be subject to a TCO. Upon meeting these criteria, the CEO must make a written order (section 269P(3)), as occurred with TCO No. 0704648, which was made on 15 June 2007 and applied to certain gas blower shell and tube oil coolers.
The obligations imposed by the Act on the CEO include the requirement to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid (subsection 269K(1)), inviting any person who considers there are reasons why the TCO should not be made to lodge a submission. In the case of TCO No. 0704648, no submissions were received in response to this invitation. Additionally, the Act requires that 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 (subsection 269S(1)). The rights of importers will be beneficially affected, with the ability to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
Under the Act, there are no specified offences, penalties, or civil/criminal consequences for breach of the TCO provisions. However, the Act ensures that the rights of individuals are protected and that no liabilities are imposed on persons (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration of a TCO. The legislative framework is designed to facilitate tariff concessions while safeguarding the rights of all parties involved.