EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712790
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.
Rigging Construction Pty Ltd applied for a TCO in respect of certain self gripping clamps on 15 August 2007.
Instrument
TCO No 0712790 was made on 19 October 2007. It declares that those certain self gripping clamps 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. 0712790 is taken to have come into force on 15 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, enacted by the Parliament of Australia, includes provisions under Part XVA that establish a framework for Tariff Concession Orders (TCOs). These orders allow the Chief Executive Officer of Customs to apply reduced rates of customs duty on specified goods, provided certain criteria are met. This legislative instrument was introduced to address the gap in ensuring that Australian businesses have access to competitively priced imported goods where no Australian-made substitutes exist. This in turn supports the broader policy objective of fostering a competitive business environment and facilitating access to essential goods without imposing undue burdens on the economy. TCO No. 0712790, made on 19 October 2007, specifically pertains to certain self-gripping clamps, reducing their duty rate from 10% to 0%, effective from the date the application was lodged on 15 August 2007. This measure was made in response to an application by Rigging Construction Pty Ltd and is designed to benefit importers by potentially allowing them to claim refunds on duties paid prior to the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0712790 under the Customs Act 1901 provides a mechanism for the Chief Executive Officer of Customs to grant tariff concessions on specified goods, thereby reducing the applicable customs duty. This legislation applies to entities and individuals who import goods into Australia and who seek to benefit from a lower rate of duty under the circumstances outlined in the Act. Specifically, it allows for a Tariff Concession Order (TCO) to be made when no substitutable goods are produced in Australia, as defined by the Act. The instrument has a national reach, applying across all states and territories within Australia, and is subject to the conditions and criteria stipulated in the Customs Act 1901 and the Customs Tariff Act 1995. The TCO does not impose any liabilities on persons other than the Commonwealth and does not affect any existing rights as of the date of registration. Additionally, the Act allows for the TCO to be extended or restricted through subordinate instruments, enabling flexibility in its application and scope.
Key Provisions
The Customs Act 1901, under section 269F, allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in relation to specific goods. If the CEO is satisfied that the application pertains to goods that are not excluded under section 269SJ and meets the core criteria as outlined in section 269C, a TCO is issued. This order declares that the goods in question are subject to a reduced customs duty rate as specified in Schedule 4 of the Customs Tariff Act 1995. The CEO's decision to issue a TCO is based on ensuring no substitutable goods were produced in Australia at the time the application was lodged, as defined under sections 269B and 269D of the Act.
The obligations placed on the applicant under this legislation include the submission of a valid application to the CEO, ensuring the goods meet the criteria set out in section 269C, and responding to any additional information or clarifications requested by the CEO. The CEO, on the other hand, must assess the application against the criteria, publish a notice in the Gazette inviting objections (section 269K(1)), and make a decision within a reasonable timeframe. In this case, Rigging Construction Pty Ltd applied for a TCO for certain self-gripping clamps, which was subsequently approved and issued on 19 October 2007 as TCO No. 0712790, effective from 15 August 2007.
Failure to comply with the provisions of the Customs Act 1901 or the terms of a TCO can lead to various consequences. Under section 269P(3), if a person knowingly makes a false statement in an application for a TCO, they may be liable for a penalty. Additionally, any person who knowingly contravenes a TCO may be subject to fines or imprisonment as outlined in the relevant sections of the Customs Act 1901. The penalties for such breaches can include substantial fines and, in severe cases, imprisonment, depending on the severity of the breach. These measures ensure adherence to the regulations and protect the integrity of the tariff concession scheme.