EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0717100
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.
G James Australia Pty Ltd applied for a TCO in respect of certain desiccant loaders on 10 October 2007.
Instrument
TCO No 0717100 was made on 21 December 2007. It declares that those certain desiccant loaders 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. 0717100 is taken to have come into force on 10 October 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. 0717100, enacted in 2007 under the Customs Act 1901, aims to provide a scheme for the reduction of customs duty on certain goods not produced in Australia. This instrument was introduced to address the need for tariff concessions where no substitutable Australian-made goods exist, thereby promoting fair trade practices and encouraging the importation of necessary goods. The instrument was enacted by the Chief Executive Officer of Customs (CEO), who is empowered under section 269F of the Act to make Tariff Concession Orders (TCOs). The policy objective is to facilitate the import of goods that are not domestically produced, which aligns with broader economic policies aimed at maintaining competitive market conditions and supporting industries reliant on imported components. As stated in the explanatory statement, the TCO will come into effect from the date the application was lodged, and it ensures that the rights of importers are not adversely affected, allowing them to apply for duty refunds on goods imported since the TCO's effective date.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which effectively lower the customs duty on specified goods. The application of this Act extends to any person who applies for a TCO in respect of goods that meet the core criteria outlined in the Act, ensuring that such goods are not substitutes for products that are already manufactured within Australia. The geographic reach of this legislation is national, as it pertains to the Commonwealth of Australia. Notably, certain goods are excluded from the scope of a TCO as per section 269SJ, which lists those goods that cannot be subject to tariff concessions. Additionally, the CEO’s decision-making process includes a mandatory public notice period under subsection 269K(1), allowing any interested party to submit objections to the proposed concession. The commencement date of a TCO is the day the application is lodged, ensuring that the tariff concession takes effect immediately upon application, as stipulated in subsection 269S(1). The Act ensures that the implementation of TCOs does not disadvantage existing stakeholders or impose new liabilities on them for actions taken prior to the concession.
Key Provisions
The Tariff Concession Instrument No. 0717100 under the Customs Act 1901 establishes a framework through which the Chief Executive Officer of Customs (CEO) can issue Tariff Concession Orders (TCOs) (s 269F). This process allows for a lower rate of customs duty on specific goods. The CEO must consider an application for a TCO if it pertains to goods not listed in section 269SJ of the Act (s 269SJ). If the application meets the core criteria outlined in section 269C, the CEO must then decide whether to issue the order (s 269C). The core criteria are met if, on the day the application is lodged, no substitutable goods are being produced in Australia in the ordinary course of business (s 269C, s 269D, s 269E). If satisfied, the CEO issues a written order (TCO) that specifies the goods and the prescribed item of Schedule 4 to the Customs Tariff Act 1995 (s 269P(3)).
The obligations imposed by the Act on the parties involved are primarily on the CEO, who must carefully assess each TCO application. The CEO must ensure that the application meets the core criteria by verifying that no substitutable goods are being produced in Australia (s 269C). Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission (s 269K(1)). The CEO also has to ensure that the rights of importers are not adversely affected by the issuance of a TCO. Once a TCO is issued, importers of the specified goods can apply for a refund of duty paid on those goods since the date the TCO is taken to have come into force (Reg 126(1)(r)).
In terms of offences and penalties, the Act does not explicitly detail specific offences or penalties related to the issuance or non-compliance with a TCO. However, any failure to adhere to the requirements of the Act, such as submitting false information or misrepresenting the nature of the goods, could potentially lead to broader legal consequences under the Customs Act 1901 or other related legislation. The CEO has the discretion to enforce compliance and may take action against entities that do not comply with the terms of the TCO or the Act. The specific penalties for non-compliance would depend on the nature of the breach and the relevant provisions of the Customs Act 1901.