EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716472
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.
Heat And Control Pty Ltd applied for a TCO in respect of certain roasting grilling plant on 28 September 2007.
Instrument
TCO No 0716472 was made on 14 December 2007. It declares that those certain roasting grilling plants 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. 0716472 is taken to have come into force on 28 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, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs to lower the rate of customs duty on specified goods. This was enacted to facilitate smoother trade and to encourage the import of goods that are not produced domestically, thereby supporting economic efficiency and consumer choice. The Explanatory Statement for Tariff Concession Instrument No. 0716472, made under the Customs Act, clarifies the process and criteria for such concessions. Specifically, this instrument addresses an application by Heat And Control Pty Ltd for a tariff concession on certain roasting grilling plants, which were determined not to have substitutable goods produced in Australia, thereby meeting the core criteria for a TCO. The policy objective is to reduce the duty on these specific goods to zero, effective from the date of the application, without imposing any retroactive liabilities or disadvantaging existing rights holders.
Scope and Application
The Customs Act 1901, through Tariff Concession Orders (TCOs) under Part XVA, allows the Chief Executive Officer of Customs to grant tariff concessions on certain imported goods. Specifically, this Act applies to any person or entity seeking a tariff concession for goods that are not already produced in Australia and for which there are no substitutable goods available domestically. The application process involves meeting core criteria, such as the absence of locally produced goods that serve the same purpose as the imported goods in question. The scope of this legislation extends to all territories under the Commonwealth of Australia, thereby ensuring a uniform approach to tariff concessions nationwide. However, the Act excludes certain goods from eligibility, as specified in section 269SJ, which outlines items that cannot be subject to a TCO. The instrument in question, TCO No. 0716472, pertains to certain roasting grilling plants, which have been granted a tariff concession effective from the date the application was lodged, 28 September 2007. This concession eliminates the duty on these specific goods, which previously carried a general duty rate of 5%. The implementation of this TCO does not affect the legal rights of any person or entity, nor does it impose any liabilities on those entities, except in cases involving the Commonwealth.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the process for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. Section 269F allows a person to apply for a TCO in relation to certain goods, provided the goods are not specified in section 269SJ. The CEO must then determine if the application meets the core criteria set out in section 269C, which requires that no substitutable goods are produced in Australia on the day the application was lodged (section 269P(3)). If these conditions are met, the CEO must issue a written TCO, specifying that the goods in question are subject to a particular rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995.
The obligations under this Act include the requirement for the CEO to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not proceed (subsection 269K(1)). The TCO, once issued, comes into effect on the date the application was lodged (subsection 269S(1)). Importantly, the TCO does not affect any existing rights of persons (other than the Commonwealth) as at the date of registration, nor does it impose any liabilities on any person for actions taken prior to the registration. Instead, it provides a benefit to importers who can now apply for a refund of duty on goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).
Any breach of the requirements or obligations set out in the Customs Act 1901 could result in penalties. However, the explanatory statement does not detail specific offences, penalties, or consequences for non-compliance with the TCO provisions. It is important for individuals and entities governed by the Act to ensure they understand and adhere to the terms and conditions of any TCO to avoid potential civil or criminal consequences, although the specifics of these consequences are not outlined in the provided text.