EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708851
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.
Patricks Defence Logistics applied for a TCO in respect of certain marine fenders on 12 June 2007.
Instrument
TCO No 0708851 was made on 17 August 2007. It declares that those certain marine fenders 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. 0708851 is taken to have come into force on 12 June 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 Tariff Concession Instrument No. 0708851, enacted under the Customs Act 1901, was introduced to address the specific needs of businesses seeking tariff concessions for goods not produced domestically. The Customs Act 1901, administered by the Parliament of Australia, provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce customs duty on imported goods if no substitutable goods are produced in Australia. In this instance, Patricks Defence Logistics applied for a TCO concerning certain marine fenders, which was subsequently granted as no domestic alternatives were available. The tariff rate for these goods was reduced from 5% to 0%, effective from the date of the application, 12 June 2007. The instrument was published in the Gazette with an invitation for objections, though none were received. The policy objective is to support Australian industries by ensuring that tariff concessions are granted judiciously, only when necessary to prevent domestic industry disadvantages.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can significantly reduce the rate of customs duty on specific goods, provided that the application for the concession aligns with the criteria outlined in the Act. The Act applies to any person or entity seeking a reduction in customs duty for goods that are not prohibited from being subject to a TCO, as specified in section 269SJ. The application process requires the applicant to demonstrate that no substitutable goods are being produced in Australia in the ordinary course of business, a determination made by the CEO based on the definitions provided in sections 269D, 269E, and 269F. The scope of the legislation is national, applying across the Commonwealth of Australia, and it extends to all industries and goods that meet the criteria for a TCO, subject to consultation processes and publication in the Gazette as stipulated in the Act. The legislation does not disadvantage any person or impose new liabilities on anyone for actions taken before the TCO was registered, ensuring that the rights of importers are positively affected by enabling them to apply for duty refunds on imports made since the TCO came into effect.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0708851, which was made under the Customs Act 1901 (the Act), primarily involve the granting of tariff concessions for certain marine fenders. Section 269F of the Act allows for applications to the Chief Executive Officer of Customs (the CEO) for Tariff Concession Orders (TCOs). If the application is deemed valid and meets the core criteria, as outlined in section 269C, the CEO must make a written TCO. This instrument specifically declares that certain marine fenders are subject to a lower rate of customs duty (item 50 of Schedule 4 to the Customs Tariff Act 1995), reducing the duty from the general rate of 5% to 0%.
The obligations imposed by the Act on the parties involved include the requirement for the CEO to ensure that no substitutable goods are produced in Australia in the ordinary course of business, as per section 269C. The CEO must also publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not be made, in accordance with subsection 269K(1). In this instance, the CEO did not receive any submissions in response to this invitation. The TCO's commencement date is the date on which the application was lodged, in this case, 12 June 2007, as per subsection 269S(1).
Failure to comply with the requirements and provisions of the Customs Act 1901 may result in various civil or criminal consequences. However, the specific offences, penalties, or consequences for breach are not detailed in the explanatory statement for Tariff Concession Instrument No. 0708851. It is important to note that the TCO does not affect the rights of any person other than the Commonwealth, nor does it impose any liabilities on any person, as stated in the instrument.