EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715854
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.
Adelux Pty Ltd applied for a TCO in respect of certain steel moulds on 21 September 2007.
Instrument
TCO No 0715854 was made on 07 December 2007. It declares that those certain steel moulds 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. 0715854 is taken to have come into force on 21 September 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 Tariff Concession Instrument No. 0715854 was enacted in 2007 under the Customs Act 1901 to provide a solution for businesses seeking reduced customs duties on specific imported goods, provided no substitutable goods are produced domestically. This instrument allows the Chief Executive Officer of Customs to make a Tariff Concession Order (TCO), which applies a lower rate of duty on certain goods, thereby supporting Australian businesses by reducing their costs. The instrument was introduced in response to applications such as that from Adelux Pty Ltd, which sought tariff concessions on certain steel moulds, where no domestic alternatives exist. The policy objective of the TCO scheme is to facilitate the importation of goods that are not produced in Australia, thereby aiding businesses in accessing competitive products and maintaining economic efficiency.
The process for establishing a TCO involves the application by interested parties to the CEO, followed by a review to ensure the goods meet the core criteria outlined in the Customs Act 1901. Once approved, the CEO issues a TCO which declares the applicable tariff rate, as seen in Instrument No. 0715854, which set the duty on certain steel moulds at free, down from the general rate of 5%. This legislative framework ensures transparency and fairness by inviting public submissions before a TCO is finalised, as mandated by the Customs Act. The commencement of the TCO aligns with the date of the application, ensuring that the rights of importers are protected and no retroactive liabilities are imposed.
Scope and Application
The Tariff Concession Instrument No. 0715854 applies to certain steel moulds for which a Tariff Concession Order (TCO) was sought and subsequently granted by the Chief Executive Officer of Customs (CEO) under section 269F of the Customs Act 1901. This instrument is specifically concerned with the concession of customs duty rates for these steel moulds, reducing the general rate of duty from 5% to free, provided that no substitutable goods are produced in Australia, as stipulated in section 269C of the Act. The TCO applies to Adelux Pty Ltd and the steel moulds they specified in their application, and it operates within the framework of the Customs Act and the Customs Tariff Act 1995. The instrument's geographic reach is nationwide, as it pertains to the importation of goods into Australia. The application of the TCO is contingent on the CEO's determination that no submissions opposing the TCO were received following the publication of the application in the Gazette, as required by subsection 269K(1) of the Customs Act. The instrument does not impose any liabilities on persons other than the Commonwealth and does not disadvantage anyone by affecting rights as they stood before the date of registration.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0715854 under the Customs Act 1901 (section 269F) enable a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of specific goods. This application process is subject to certain criteria, outlined in section 269C, which mandates that the goods cannot have substitutable equivalents produced in Australia in the ordinary course of business at the time the application is lodged. The CEO must then decide if the application meets these core criteria. If satisfied, the CEO issues a TCO, declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). In this instance, the TCO No. 0715854 pertains to certain steel moulds, declaring that these goods are subject to item 50 of Schedule 4 to the Tariff, with the duty rate set at free instead of the general rate of 5%.
The Act imposes specific obligations on the parties involved. The CEO of Customs must ensure that any TCO application is not in respect of goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. Upon accepting a valid TCO application, the CEO is required to publish a notice in the Gazette, inviting any person who believes there are reasons against the TCO to submit their views. This procedural step aims to ensure transparency and allow for any objections to be considered before a TCO is issued. Furthermore, section 269K(1) mandates that the TCO comes into force on the day the application is lodged, as per subsection 269S(1).
For the specific case of TCO No. 0715854, the CEO was satisfied that no substitutable goods were produced in Australia when the application for the steel moulds was lodged on 21 September 2007. The TCO was subsequently made on 7 December 2007, and it took effect from the date of the application. The CEO did not receive any submissions opposing the TCO, ensuring the process remained unimpeded.
In terms of consequences for breach, the Act does not specify particular offences or penalties for failing to comply with the requirements of a TCO. However, any non-compliance with the Customs Act 1901, including issues related to TCOs, could potentially lead to broader legal ramifications under the Act, such as fines and penalties for incorrect declarations or fraudulent activities. The specific consequences for breach would depend on the nature and severity of the non-compliance, with penalties potentially including fines or imprisonment as determined by the courts. The TCO itself does not impose any liabilities on any person, safeguarding the rights of individuals and entities, except for the Commonwealth, as per the Act.