EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712976
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.
Beltrami Group Unit Trust applied for a TCO in respect of certain brass tank outlets on 21 August 2007.
Instrument
TCO No 0712976 was made on 31 January 2008. It declares that those certain brass tank outlets 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. 0712976 is taken to have come into force on 21 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, provides a framework for the administration of customs duties and the regulation of imports and exports. Specifically, Part XVA of the Act outlines the process for making Tariff Concession Orders (TCOs), which allow for the application of lower customs duty rates on certain goods. The explanatory statement for Tariff Concession Instrument No. 0712976, issued on 31 January 2008, details the application of a TCO to certain brass tank outlets, reducing the duty rate from 5% to free. The Tariff Concession Orders mechanism addresses the need for flexibility in tariff application to support specific industries and economic policies, ensuring that imported goods that have no local substitutes are not subject to higher customs duties, thereby fostering competitive pricing and market access. The Tariff Concession Order process requires consultation and notice, which was observed in this case with no submissions received against the Beltrami Group Unit Trust's application.
Scope and Application
The Tariff Concession Instrument No. 0712976, issued under the Customs Act 1901, applies to certain brass tank outlets which Beltrami Group Unit Trust sought tariff concessions for. This legislation enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods not specified in section 269SJ of the Act, which includes goods that cannot be subject to a TCO. The TCO applies to specific brass tank outlets that were declared tariff-free as no substitutable goods were produced in Australia on the date the application was lodged. The application process requires that the CEO ensures the goods meet the core criteria as per section 269C of the Act, which necessitates that the goods in question are not produced domestically in the ordinary course of business. The TCO has a Commonwealth jurisdictional reach and is effective from the date the application was lodged, 21 August 2007, without retroactively affecting the rights of any person or imposing liabilities on anyone for actions taken before the registration date.
Key Provisions
The main operative sections of the Customs Act 1901 concerning Tariff Concession Orders (TCOs) are sections 269C, 269F, and 269P. Section 269F (1) allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided these goods are not specified in section 269SJ of the Act. Section 269C sets out the core criteria that an application must meet; specifically, the CEO must be satisfied that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the application meets these criteria, section 269P (3) mandates that the CEO must make a written order declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on parties or entities it governs are primarily directed towards the CEO of Customs. The CEO must ensure that any TCO application is assessed against the core criteria specified in section 269C. If the CEO determines that an application meets these criteria, they must proceed to make the written order, as stipulated in section 269P (3). Additionally, under section 269K (1), the CEO has an obligation to publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made. This ensures that the process is transparent and allows for any potential objections to be considered before the order is finalised.
There are no specific offences, penalties, or civil or criminal consequences outlined in the provided text for breach of the Act’s provisions regarding TCOs. However, the Act does emphasise that the TCO does not affect the rights of any person, other than the Commonwealth, in a manner that would disadvantage them or impose liabilities for actions taken before the TCO was registered. This means that any person who has already imported goods before the TCO was made is not subject to the new tariff conditions, but they may be eligible for a refund of duty under the terms specified in the Customs (Admin) Regulations 1979. The Act’s focus appears to be more on ensuring the correct application of tariff concessions rather than imposing punitive measures for non-compliance.