EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0710607
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.
John Holland Pty Ltd applied for a TCO in respect of certain filter parts on 13 July 2007.
Instrument
TCO No 0710607 was made on 21 September 2007. It declares that those certain filter 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 10%. 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. 0710607 is taken to have come into force on 13 July 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, establishes a framework for the administration of customs and excise, including the ability to grant tariff concessions through Tariff Concession Orders (TCOs). The primary objective of this legislative mechanism is to facilitate access to goods that are not produced domestically, thus supporting economic efficiency and consumer choice. This Act allows the Chief Executive Officer of Customs to make orders that effectively reduce or eliminate customs duties on specific goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The Tariff Concession Instrument No. 0710607, enacted in 2007, is an example of this process, wherein a zero percent duty rate was applied to certain filter parts following an application by John Holland Pty Ltd. The instrument ensures that no pre-existing rights of third parties are adversely affected, while also allowing importers to apply for duty refunds on eligible goods imported since the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 0710607, issued under the Customs Act 1901, applies to any entity or person who imports goods subject to the instrument, specifically certain filter parts that are now subject to a 0% duty rate instead of the general 10% rate. This concession is effective for goods that are imported after the application date, 13 July 2007. The legislation applies nationally, governed by the Commonwealth. However, it does not extend to goods specified in section 269SJ of the Act, which cannot be subject to a Tariff Concession Order (TCO). The process for establishing such concessions involves an application to the Chief Executive Officer of Customs (CEO), who must determine that no substitutable goods are produced in Australia before making a TCO. This instrument is specific and does not broadly exempt or alter existing rights or liabilities for entities other than the Commonwealth, ensuring that any benefits, such as refunds of duty, apply prospectively from the effective date of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0710607 under the Customs Act 1901 (section 269F) involve the application process for Tariff Concession Orders (TCOs) and the conditions under which they may be granted. Section 269C stipulates that a TCO application is valid if, on the day the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business. Section 269D defines "goods produced in Australia", section 269E defines "ordinary course of business", and section 269F specifies the process for applying for a TCO.
Under the Act, the Chief Executive Officer of Customs (CEO) has the responsibility to review applications and decide whether they meet the core criteria for a TCO. If the CEO determines that the application meets the criteria, they are required to issue a written order that specifies the goods to which the concession applies. In this case, the CEO was satisfied that no substitutable goods were being produced in Australia in the ordinary course of business for the certain filter parts in question, and thus issued a TCO on 21 September 2007 (section 269P(3)).
The obligations imposed by the Act on the parties involved are primarily on the CEO, who must assess applications for TCOs and ensure they meet the core criteria as defined in sections 269B, 269C, 269D, and 269E. The CEO must also publish a notice in the Gazette inviting any interested parties to submit objections or submissions against the TCO application (subsection 269K(1)). In this instance, no submissions were received in response to the published notice.
The Act does not specify any direct obligations on applicants or affected parties beyond the submission of the application and any required documentation. However, it does stipulate that the rights of any person (other than the Commonwealth) as at the date of registration of the TCO should not be adversely affected or new liabilities imposed (subsection 269S(1)).
Regarding consequences and penalties for breach, the Act does not explicitly state penalties for failing to comply with the provisions of a TCO or for submitting a non-compliant application. However, any breaches of related customs laws or fraud related to the importation or declaration of goods may incur penalties under other sections of the Customs Act 1901 or the Crimes Act 1914. These penalties can include fines and imprisonment, with the specifics depending on the nature and severity of the offence.