EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712804
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.
CSR Building Products Ltd applied for a TCO in respect of a certain wheel cleaning line on 13 August 2007.
Instrument
TCO No 0712804 was made on 29 October 2007. It declares that those certain wheel cleaning lines 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. 0712804 is taken to have come into force on 13 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 by the Parliament of Australia and provides the legal framework for the regulation of customs and excise duties, among other things. The Act includes provisions for the establishment of a tariff concession scheme, which was introduced to address the gap in providing duty concessions on specific imported goods where no suitable Australian-made alternatives exist. This scheme allows for the application of lower customs duty rates on goods specified in a Tariff Concession Order (TCO). The Tariff Concession Instrument No. 0712804, made under this scheme, was enacted to provide tariff concessions for certain wheel cleaning lines, recognising that no substitutable goods were produced in Australia. The policy objective is to encourage the importation of goods that are not domestically produced, thereby supporting industry needs and potentially lowering costs for businesses that rely on these imported items.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to entities and individuals seeking to import goods into Australia, provided that the goods in question do not fall under the category specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. A TCO application is subject to core criteria outlined in sections 269C, 269D, 269E, and 269F, where the application is valid if, on the date of lodging, no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are met, the CEO must issue a written order reducing the customs duty on the specified goods. This instrument has a national reach, applying to all entities and individuals importing goods into Australia and seeking tariff concessions. The application of the Act is not restricted by geographic or jurisdictional boundaries within Australia. However, the Act does not provide for exclusions or exemptions beyond those specified in section 269SJ. The Act’s scope may be extended or restricted through subordinate instruments such as regulations or further orders, although no such extensions or restrictions are currently specified in the explanatory statement for TCO No. 0712804.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0712804 under the Customs Act 1901 establish a mechanism whereby the Chief Executive Officer (CEO) of Customs can issue Tariff Concession Orders (TCOs) (ss 269C, 269F, 269P). A TCO applies a lower rate of customs duty to specific goods, provided that certain conditions are met. For instance, Section 269C specifies that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This definition is further explained in sections 269D, 269E, and 269F, which clarify the terms "goods produced in Australia," "ordinary course of business," and "substitutable goods," respectively.
Under this legislation, the CEO has specific obligations when processing a TCO application. Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be made (s 269K(1)). This ensures transparency and provides an opportunity for public input. In the case of TCO No. 0712804, the CEO did not receive any submissions in response to this invitation, leading to the issuance of the order on 29 October 2007. The TCO itself is effective from the date the application was lodged, 13 August 2007 (s 269S(1)).
For breaches of the provisions outlined in this Act, specific penalties may apply. However, the explanatory statement does not detail these penalties, focusing instead on the operational aspects of the TCO process. The absence of submissions against the TCO suggests a smooth application of the legislative framework, but any failure to comply with the notice requirements or other procedural obligations could potentially lead to administrative or legal consequences. The TCO ensures that the rights of importers are positively affected, allowing them to apply for refunds of duty paid on goods imported since the TCO's effective date, without imposing any new liabilities on individuals or entities other than the Commonwealth.