EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707310
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.
Specialised Force Pty Ltd applied for a TCO in respect of certain electrohydraulic compression tools on 16 May 2007.
Instrument
TCO No 0707310 was made on 27 July 2007. It declares that those certain electrohydraulic compression tools 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. 0707310 is taken to have come into force on 16 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, enacted by the Australian Parliament, serves as the foundational legislation governing customs and border control in Australia. One of its key provisions is the establishment of a scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The Tariff Concession Instrument No. 0707310, introduced to address the need for reduced customs duties on specific goods, aims to facilitate trade by lowering the duty rates on goods for which no substitutable Australian-made products exist. This instrument was made to provide tariff relief on certain electrohydraulic compression tools, acknowledging their unique nature and the absence of suitable alternatives produced domestically. The policy objective behind this concession is to support industries that rely on the importation of these specialised tools, thereby promoting economic efficiency and competitiveness without disadvantaging existing rights or imposing new liabilities.
Scope and Application
The Customs Act 1901, as amended, provides a framework through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) under section 269F. This Act applies to any person or entity seeking a concession on customs duty for specific goods, provided these goods are not listed in section 269SJ of the Act, which includes goods that cannot be subject to a TCO. The application process requires the applicant to demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D. This concession is applicable nationally across Australia, as the Customs Act is a Commonwealth Act. The scope of the Act extends to all industries and goods that meet the specified criteria, and it allows for the CEO to make TCOs through subordinate instruments, as evidenced by TCO No. 0707310 for certain electrohydraulic compression tools. The Act ensures that no existing rights or liabilities are adversely affected by the concession, and it includes a mechanism for the CEO to publish notices in the Gazette and invite submissions, although in this instance, no submissions were received.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0707310 include section 269C (3) (subsections 269F and 269P) of the Customs Act 1901, which provide the criteria for making a Tariff Concession Order (TCO). These sections require that the Chief Executive Officer of Customs (CEO) must consider whether a TCO application meets the core criteria, which primarily involves ensuring that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that these criteria are met, they must make a written order declaring that the goods in question are subject to a prescribed rate of duty, as specified in Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on parties or entities it governs. Firstly, any person seeking a tariff concession must apply to the CEO, providing all necessary information to demonstrate that the core criteria are met. The CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made. The CEO must also ensure that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied with the application, they must make the TCO and declare it in writing. Importers benefit from the TCO by being able to apply for a refund of duty on goods imported since the TCO came into force.
There are no explicit offences, penalties, or civil/criminal consequences for breach stated in the legislation concerning the TCO process itself. However, any misuse of the concessions granted by the TCO, such as fraudulent claims for duty refunds or misrepresentation of goods, could lead to separate legal consequences under other provisions of the Customs Act 1901 and associated regulations. These might include civil penalties, criminal charges, and potential imprisonment, depending on the nature and severity of the breach.