EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707024
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.
B & R Enclosures Pty Ltd applied for a TCO in respect of certain coolers on 10 May 2007.
Instrument
TCO No 0707024 was made on 23 July 2007. It declares that those certain 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. 0707024 is taken to have come into force on 10 May 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 was amended to introduce Tariff Concession Orders (TCOs) as a mechanism for the Chief Executive Officer of Customs to grant tariff concessions on certain imported goods. The Tariff Concession Instrument No. 0707024, enacted in 2007, addresses the problem of ensuring that goods subject to TCOs are not produced in Australia and are not substitutable with locally manufactured items, thereby preventing potential economic displacement of Australian industry. The policy objective, as stated in the explanatory statement, is to provide relief on customs duties for specific imported goods, thus supporting trade and economic efficiency without undermining local production. The instrument was enacted by the relevant federal authority, and it ensures that the rights of importers are protected while granting tariff concessions that do not retroactively affect pre-existing duties or impose new liabilities.
Scope and Application
The Customs Act 1901, under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The Act applies to individuals or entities seeking to import goods that may be eligible for a reduced rate of customs duty through the application of a TCO. The scope of the Act is national, affecting all importers across Australia. A TCO can be applied for in respect of goods, provided they are not specified in section 269SJ, which lists goods ineligible for tariff concessions. The application process requires the CEO to determine if no substitutable goods are produced in Australia at the time the application is lodged, as outlined in section 269C. If the core criteria are met, the CEO must issue a written order making the goods subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, effectively granting a tariff concession. The application of TCOs does not retroactively disadvantage any person or impose liabilities on anyone for actions taken before the TCO's effective date, ensuring that only future imports benefit from the reduced duty rate. The Act allows for the extension of its application through subordinate instruments, which may further define the parameters of eligibility and administration for TCOs.
Key Provisions
The primary sections of the Customs Act 1901 that govern Tariff Concession Orders (TCOs) include section 269F, which allows for the application for a TCO, and section 269C, which outlines the core criteria that an application must meet. Section 269F provides that a person may apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods, provided they are not specified in section 269SJ of the Act. Section 269C specifies that an application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that these criteria are met, they must make a written order declaring the goods to which the TCO applies (subsection 269P(3)).
The obligations imposed by the Act on the parties involved primarily concern the application process and the CEO's responsibilities. Under section 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice must include an invitation for any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. If no submissions are received, the CEO proceeds with making the TCO. The CEO is also responsible for ensuring that the application meets the core criteria specified in section 269C, including verifying that no substitutable goods were produced in Australia on the day the application was lodged.
In terms of breaches and consequences, the Act does not explicitly detail offences, penalties, or consequences for failing to comply with the requirements set out in the legislation. However, any failure by the CEO to properly assess an application or to follow the stipulated process could potentially lead to legal challenges or administrative reviews. The rights of importers are protected by the provision that the TCO does not affect their rights as at the date of registration, and they may apply for a refund of duty on goods imported since the TCO was taken to have come into force (paragraph 126(1)(r) of the Regulations). The Act ensures that the TCO does not impose any liabilities on any person, thereby safeguarding against potential financial repercussions for non-compliance.