EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707641
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.
Visy Industries Pty Ltd applied for a TCO in respect of certain hot runner parts on 22 May 2007.
Instrument
TCO No 0707641 was made on 10 August 2007. It declares that those certain hot runner parts 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 0%.
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. 0707641 is taken to have come into force on 22 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 Parliament of Australia, addresses the need for a streamlined process to grant tariff concessions on imported goods. This Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the customs duty on specified goods, provided certain conditions are met. The purpose of this legislation is to ensure that imported goods which are not produced in Australia, and for which no suitable domestic alternatives exist, benefit from reduced tariff rates, thereby supporting industries and potentially lowering consumer prices. The process is designed to be transparent and inclusive, with opportunities for public submissions on proposed TCOs, although in this instance, no such submissions were received. The policy objective is to facilitate trade by reducing the cost of imported goods where there is no local production of substitutable goods.
Scope and Application
The Customs Act 1901 applies to individuals, businesses, and entities involved in the importation of goods into Australia, including those seeking tariff concessions. The Act's scope encompasses the process by which Tariff Concession Orders (TCOs) can be applied for and granted by the Chief Executive Officer of Customs, provided the goods in question are not specified as ineligible in section 269SJ of the Act. This legislative framework ensures that a lower rate of customs duty can be applied to eligible goods, contingent on the absence of substitutable goods produced in Australia at the time the application is lodged, as per sections 269C and 269D of the Act. The geographic reach of the Act extends nationally, as it is a Commonwealth Act, and it applies to all imported goods subject to the Customs Tariff Act 1995. The Act does not impose any liabilities on persons other than the Commonwealth and does not disadvantage any person's rights as they stood at the date of registration of the TCO. The Act’s application may also be extended or refined through subordinate instruments, although the primary provisions are self-contained within the Act itself.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0707641 (F2007L03466) under the Customs Act 1901, primarily focus on the establishment of tariff concessions for certain hot runner parts. Section 269F (1) allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) regarding specific goods. If the application is not in respect of goods specified in section 269SJ, the CEO must then assess whether the application meets the core criteria outlined in section 269C. This assessment hinges on whether, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269D and section 269E).
If the CEO is satisfied that the application meets the core criteria, they must make a TCO (subsection 269P(3)). This written order declares that the goods in question are subject to a specific item in Schedule 4 of the Customs Tariff Act 1995. For Instrument 0707641, the CEO declared that certain hot runner parts are subject to item 50 of Schedule 4, with a reduced duty rate of 0%, down from the general rate of 5%.
The obligations imposed by the Act on the parties governed by it are twofold. Firstly, the CEO is obligated to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid (subsection 269K(1)). This notice invites any interested parties to submit reasons why the TCO should not be made. Secondly, the Act requires the CEO to ensure that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration in a manner that would disadvantage that person or impose liabilities on them in respect of actions taken before the date of registration (subsection 269S(1)).
Regarding the consequences of non-compliance or breach, the Act does not explicitly state civil or criminal penalties for failing to comply with the TCO provisions. However, the Act ensures that importers of goods subject to a TCO can apply for a refund of duty paid on those goods since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). This provision aims to provide relief and ensure that the tariff concessions are effectively applied without imposing undue liabilities on any party.