EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712493
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.
PFDPA Pty Ltd applied for a TCO in respect of certain thermal imaging paper on 03 August 2007.
Instrument
TCO No 0712493 was made on 29 October 2007. It declares that those certain thermal imaging papers 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. 0712493 is taken to have come into force on 03 August 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 enacted to provide a comprehensive framework for the regulation of customs and excise duties in Australia. The Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This was introduced to address the need for flexible tariff arrangements that could respond to specific economic or policy considerations, such as promoting certain industries or responding to international trade agreements. Parliament enacted this framework to provide a mechanism for the CEO to grant tariff concessions on goods, provided certain criteria are met, thereby allowing for a more nuanced approach to tariff regulation. The policy objective is to facilitate trade and industry development by allowing for reduced customs duties on specified goods, which can be particularly beneficial in fostering competitive markets and supporting Australian manufacturing and innovation.
Scope and Application
The Customs Act 1901, through its Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply to specific goods and reduce the customs duty on them if certain criteria are met. The application process involves an assessment by the CEO to ensure that the goods in question are not substitutable by products manufactured in Australia and are not specified as ineligible under section 269SJ of the Act. If the application fulfills the core criteria outlined in sections 269C, 269B, and 269D of the Act, the CEO must issue a TCO. For instance, TCO No. 0712493 was issued for certain thermal imaging papers, granting them a duty-free status effective from the date of application on 3 August 2007. The Act mandates public consultation on TCO applications, although in this case, no submissions were received. The TCO does not retroactively disadvantage any party or impose liabilities for actions prior to its registration, ensuring that only importers stand to benefit, particularly through potential duty refunds under the Regulations.
Key Provisions
The main operative sections of this legislation are found within Part XVA of the Customs Act 1901, which sets out the scheme under which Tariff Concession Orders (TCOs) may be made (s 269F). This scheme allows for the application of a lower rate of customs duty to goods that are the subject of a TCO (s 269P(3)). Specifically, section 269C of the Act provides the core criteria that must be met for a TCO to be made, which includes the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). Definitions for terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269B respectively.
In terms of obligations and requirements, the Act imposes several duties on the Chief Executive Officer of Customs (CEO). The CEO must decide whether an application for a TCO meets the core criteria (s 269C) and, if satisfied, must make a written order declaring the goods to which the TCO applies (s 269P(3)). The CEO is also required to publish a notice in the Gazette, inviting submissions from any person who may have reasons why the TCO should not be made (s 269K(1)). Additionally, the CEO must ensure that the rights of a person (other than the Commonwealth) are not adversely affected by the TCO as at the date of registration (s 269S(1)).
There are no explicit offences, penalties, or civil/criminal consequences outlined for breach of the provisions in this particular legislation. However, the Act ensures that the rights of importers are beneficially affected, with the ability to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force (Reg 126(1)(r)). This suggests that while the Act does not impose penalties, it provides mechanisms for ensuring that importers are not disadvantaged by the concessions granted.