EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716465
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.
Secura Holding Pty Ltd applied for a TCO in respect of certain scaffolding components on 27 September 2007.
Instrument
TCO No 0716465 was made on 10 December 2007. It declares that those certain scaffolding components 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 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. 0716465 is taken to have come into force on 27 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 was enacted by the Parliament of Australia to provide a comprehensive framework for the regulation of imports and exports, including the imposition and collection of customs duty. The Act was designed to address the need for a streamlined and efficient process for managing the flow of goods across Australia's borders, ensuring that customs duties are levied appropriately while facilitating trade. The Tariff Concession Instrument No. 0716465 was introduced as a means to provide targeted relief from customs duties on specific goods, in this case certain scaffolding components, under the scheme set out in Part XVA of the Customs Act. This legislative instrument was made to address the specific application by Secura Holding Pty Ltd, aiming to reduce the financial burden on importers of these goods by eliminating the duty on them, thus encouraging their use and potentially benefiting the construction industry.
Scope and Application
The Customs Act 1901, under Part XVA, outlines a scheme whereby Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty on specified goods. This Act applies to any individual or entity seeking to import goods that qualify for a TCO, provided the goods do not fall under the list of items specified in section 269SJ, which are ineligible for tariff concessions. The Act's jurisdictional reach is national, impacting all importers across Australia. Any person may apply for a TCO, and if the CEO determines that the application meets the core criteria set out in sections 269C, 269B, 269D, and 269E, a TCO is issued. The application process mandates that no substitutable goods are produced in Australia in the ordinary course of business at the time of application. Once a TCO is issued, it is effective from the date the application was lodged, as stipulated in subsection 269S(1), and does not affect the rights of any person as at the date of registration regarding actions taken prior to the registration date.
Key Provisions
The main operative sections of this legislation are sections 269F, 269C, 269B, 269P, and 269SJ of the Customs Act 1901. Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. Section 269C states 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. Section 269B defines key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, a written TCO must be made. Section 269SJ specifies the goods that cannot be subject to a TCO. The CEO must also consult with relevant parties and publish a notice in the Gazette inviting submissions before making a decision on the application.
The obligations imposed on parties by this legislation include the requirement for applicants to ensure that their goods are not substitutable by goods produced in Australia and that they meet the core criteria outlined in section 269C. The CEO has an obligation to review the application and determine whether it meets these criteria. If satisfied, the CEO must make a TCO. Additionally, the CEO must publish a notice in the Gazette and invite submissions from any person who may have reasons why the TCO should not be made. The applicant must also ensure that their application does not concern goods specified in section 269SJ.
There are no explicit offences, penalties, or consequences mentioned in the explanatory statement for breaches of the Act or the TCO. However, non-compliance with the terms of the TCO could potentially lead to disputes regarding duty refunds or other customs-related liabilities. The TCO itself does not impose any liabilities on any person other than the Commonwealth. Importers can apply for a refund of duty on goods imported since the TCO is taken to have come into force under the Customs Act 1901. The rights of importers will be beneficially affected, but no disadvantages or liabilities are imposed on any person other than the Commonwealth.