EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715913
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.
Laminex Pty Ltd applied for a TCO in respect of certain stainless steel junction boxes on 20 September 2007.
Instrument
TCO No 0715913 was made on 30 November 2007. It declares that those certain stainless steel junction boxes 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. 0715913 is taken to have come into force on 20 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 Customs Act 1901, enacted by the Australian Parliament, established a framework for the imposition of customs duties on imported goods. One of the mechanisms provided within the Act is the Tariff Concession Order (TCO), which allows for a lower rate of customs duty to be applied to specified goods under certain conditions. The Tariff Concession Instrument No. 0715913, made in 2007, addresses the issue of applying for tariff concessions by providing a streamlined process for businesses to apply for and receive concessions on specific goods. The policy objective of this instrument is to provide relief to businesses by reducing the customs duty on certain goods, thereby supporting economic efficiency and competitiveness without imposing any disadvantages or liabilities on parties other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0715913, made under the Customs Act 1901, applies to the specific goods identified in the instrument, namely certain stainless steel junction boxes, which are now eligible for a lower rate of customs duty following the application by Laminex Pty Ltd. The Act allows for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) for goods that meet the core criteria, specifically if no substitutable goods are produced in Australia. The TCO in question was made effective from 20 September 2007, the date on which the application was lodged, and imposes no liabilities or disadvantages to any person other than the Commonwealth. The geographical reach of this legislation is national, impacting all importers of the specified goods within Australia. The application process involves public consultation, where the CEO invites submissions on the proposed concession, although no submissions were received for this particular TCO. Additionally, the application and effect of this TCO are subject to any subordinate instruments that may further define or restrict its application.
Key Provisions
The key sections of the Customs Act 1901 that govern Tariff Concession Orders (TCOs) are sections 269C, 269F, 269S, and 269P. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. If the application is deemed not to be in respect of goods specified in section 269SJ, the CEO must then assess whether the application meets the core criteria as outlined in section 269C. This section requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO determines that the application meets these criteria, they must issue a written order, the TCO, which specifies that the goods in question are subject to a prescribed tariff concession, as per subsection 269P(3).
The obligations imposed on parties by this Act are primarily on the CEO of Customs. Upon receiving a valid application for a TCO, the CEO must publish a notice in the Gazette, inviting any interested party to submit reasons why the TCO should not be granted. This is a crucial step in ensuring transparency and providing an opportunity for public consultation. Additionally, if the CEO decides to proceed with the TCO, they must ensure it complies with all statutory requirements and that the specified goods do not have substitutable alternatives produced in Australia. This involves a thorough examination of the production and use of potential substitutable goods.
In terms of consequences for breach, the Act does not explicitly state specific offences or penalties for non-compliance with the TCO provisions. However, failure to adhere to the statutory requirements for issuing a TCO or neglecting to follow the necessary procedural steps could potentially lead to legal challenges or administrative penalties. For example, if the CEO issues a TCO without fulfilling the core criteria, it could result in the TCO being contested in court, leading to its potential annulment. While the Act does not specify maximum penalties for such breaches, it is clear that non-compliance could have significant legal and financial repercussions for the involved parties.
Furthermore, the Act stipulates that a TCO does not affect the rights of any person, except the Commonwealth, as at the date of registration in a way that would disadvantage that person or impose liabilities for actions taken prior to the registration date. This provision ensures that the rights of importers and others are protected, and it also assures that the TCO does not retroactively impose any new liabilities or rights. This means that while the TCO is effective from the date it is lodged, it does not alter pre-existing rights or obligations. Importers, for instance, can apply for refunds of duty on goods imported since the TCO came into force, as per the Regulations under section 126(1)(r).