EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711515
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.
Total Tools (Importing) Pty Ltd applied for a TCO in respect of certain tool sets on 17 July 2007.
Instrument
TCO No 0711515 was made on 21 September 2007. It declares that those certain tool sets 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. 0711515 is taken to have come into force on 17 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 was amended to include a scheme for Tariff Concession Orders (TCOs) through Part XVA, addressing the gap in facilitating tariff reductions for specific imported goods where no Australian-made alternatives exist. Enacted by the Parliament of Australia, this provision aims to boost competitiveness and consumer choice by allowing the Chief Executive Officer of Customs to apply a lower customs duty rate on certain imported goods, provided no substitutable goods are produced in Australia. This approach responds to applications from businesses like Total Tools (Importing) Pty Ltd, which sought concessions on specific tool sets, resulting in Instrument TCO No. 0711515 that exempts these items from the usual 5% duty rate. This legislative mechanism ensures that the rights of importers are preserved and can benefit from duty refunds for goods imported since the effective date of the TCO, without imposing any new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0711515, pursuant to Part XVA of the Customs Act 1901, applies to the process by which the Chief Executive Officer of Customs (the CEO) may grant Tariff Concession Orders (TCOs) to certain imported goods. A TCO provides for a lower rate of customs duty on the specified goods, provided the application meets the core criteria as outlined in the Act. The instrument primarily applies to individuals or entities that seek to import goods eligible for tariff concessions, ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of the Act is national, as it applies across Australia under the Commonwealth’s legislative power. There are specified exclusions under section 269SJ of the Act, which detail goods that cannot be subject to a TCO. The Act may extend its application through subordinate instruments, such as the Customs Tariff Act 1995, which sets out the prescribed rates of duty applicable to goods subject to a TCO.
Key Provisions
The Customs Act 1901 (the Act) provides for the establishment of Tariff Concession Orders (TCOs) under section 269F. Section 269C outlines the core criteria that must be met for a TCO to be issued. According to this section, a TCO application meets the core criteria if, on the day the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business. The terms "substitutable goods" and "ordinary course of business" are defined in sections 269D and 269E respectively. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they must issue a written order (section 269P(3)).
The obligations imposed on the parties governed by this Act are primarily on the CEO. They must ensure that any TCO application is assessed against the core criteria (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions if a TCO application is accepted as valid (subsection 269K(1)). If no submissions are received, the CEO can proceed to issue the TCO. For instance, TCO No. 0711515 was issued on 21 September 2007, declaring that certain tool sets were subject to the order because no substitutable goods were being produced in Australia at the time of the application.
Any breach of the provisions of the Act, including the failure to comply with the conditions for issuing a TCO, could result in civil or criminal consequences. However, the explanatory statement does not detail specific offences or penalties. It is understood that the Act provides for various sanctions for breaches, which could include fines or imprisonment depending on the severity and nature of the breach. The exact penalties would be determined in accordance with other relevant sections of the Customs Act and associated regulations.
In summary, the key provisions of this legislation require the CEO to assess TCO applications against specific criteria and publish notices inviting public submissions. If no objections are raised, the CEO must issue a written order declaring the goods subject to the concession. The obligations are mainly on the CEO to ensure compliance with these processes. While the explanatory statement does not detail specific penalties, breaches of the Customs Act can result in civil or criminal sanctions.