EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0717854
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.
Anderson Industries (Aust) Pty Ltd applied for a TCO in respect of certain underground coal loader parts on 18 October 2007.
Instrument
TCO No 0717854 was made on 18 January 2008. It declares that those certain underground coal loader parts 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. 0717854 is taken to have come into force on 18 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework through which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) to provide tariff concessions on certain goods. This mechanism was introduced to address the need for flexibility in the imposition of customs duties, particularly to support industries that cannot compete with locally produced goods. The Act allows for the application of a lower rate of customs duty on goods specified in a TCO, provided the application meets the core criteria set out in the legislation. The Tariff Concession Instrument No. 0717854, made on 18 January 2008, is an example of this process in action, where a TCO was issued for certain underground coal loader parts, reducing their duty rate from 5% to free. This instrument highlights the policy objective of the Act to facilitate trade by reducing the cost burden on specific imported goods, thereby supporting certain sectors of the economy.
Scope and Application
The Customs Act 1901, as amended, provides a framework for Tariff Concession Orders (TCOs), which allow for the reduction or waiver of customs duty on certain goods. Specifically, Part XVA of the Act enables the Chief Executive Officer of Customs to make TCOs that apply a lower rate of duty to goods, provided that no substitutable goods are produced in Australia at the time the application is made. This concession is contingent upon the applicant meeting the core criteria set out in the Act, which includes ensuring that the goods in question are not specified as ineligible under section 269SJ and that no substitutable goods are produced domestically in the ordinary course of business. This legislative framework applies to any individual or entity that applies for a TCO, with a particular focus on the goods they seek to import or produce. The geographic scope of this Act is national, given its Commonwealth jurisdiction, and it extends to all industries and transactions involving the importation or production of goods that may be subject to customs duties. The Act does not specify any exclusions or exemptions beyond those detailed, but it does clarify that the rights of persons other than the Commonwealth are not adversely affected by the TCO. The TCO, once made, comes into effect on the date the application is lodged, as per subsection 269S(1) of the Act. Subordinate instruments may further define or expand upon the application of TCOs, but the primary legislation sets out the core conditions and criteria for their issuance.
Key Provisions
The primary operative sections of this legislation revolve around the making of Tariff Concession Orders (TCOs) as detailed in Part XVA of the Customs Act 1901. Specifically, section 269F allows for applications to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, and that the goods are not specified in section 269SJ as ineligible for a TCO, the CEO is required to issue a written order (section 269P(3)) declaring that the goods in question are subject to a lower rate of customs duty, as specified in the relevant item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. For instance, any person seeking a TCO must submit an application to the CEO (section 269F). The CEO, upon receiving a valid application, must determine whether the application meets the core criteria, specifically if no substitutable goods were produced in Australia in the ordinary course of business (section 269C). If these criteria are met, the CEO must then publish a notice in the Gazette, inviting submissions from any interested parties who may oppose the TCO (subsection 269K(1)). The CEO must also consider any submissions received and decide whether to proceed with making the TCO (subsection 269S(1)).
The legislation also sets out specific consequences for non-compliance or breaches. Although the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences, it is reasonable to infer that failure to adhere to the provisions regarding TCO applications and the process could result in the non-approval of the TCO, which would leave the applicant subject to the standard customs duty rates. Additionally, any misuse or fraudulent application could potentially lead to legal actions under other parts of the Customs Act or related legislation, which might include fines or other penalties as prescribed by law.
In summary, the key provisions of this legislation focus on the process of applying for and granting Tariff Concession Orders, ensuring that the criteria are met, and that all due processes are followed. The obligations rest primarily with the applicant to submit a valid application and with the CEO to evaluate and decide on the application in accordance with the statutory requirements. While the specific penalties for non-compliance are not detailed in this particular explanatory statement, it is clear that adherence to the process is critical to avoid the standard customs duty rates applying to the goods in question.