EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718292
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.
Adapt Australia Pty Ltd applied for a TCO in respect of certain power fuses on 25 October 2007.
Instrument
TCO No 0718292 was made on 31 January 2008. It declares that those certain power fuses 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. 0718292 is taken to have come into force on 25 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. 0718292, enacted under the Customs Act 1901, aims to provide a framework for the application and administration of Tariff Concession Orders (TCOs), which grant reduced customs duties on specific goods. This legislative instrument was introduced to address the need for flexibility in customs duty rates, ensuring that Australian importers can benefit from lower duties on certain goods where Australian-made alternatives do not exist. Enacted by the relevant federal authority, the primary policy objective of this legislation is to support Australian businesses by making imported goods more competitive, thereby encouraging trade and economic growth. The instrument ensures that the rights of individuals and businesses are protected, and that the process for applying and reviewing TCOs is transparent and fair.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can result in a lower rate of customs duty on certain goods. This Act applies to any person or entity that seeks to import goods that might benefit from a TCO. The geographic reach of this Act is national, as it pertains to the Commonwealth of Australia. Exclusions from TCOs include goods specified in section 269SJ of the Act, which details goods that are not eligible for tariff concessions. The application of the Act may be extended or restricted through subordinate instruments, which are not detailed in the explanatory statement but may include regulations or other legislative instruments. The Tariff Concession Instrument No. 0718292, for instance, was made in response to an application by Adapt Australia Pty Ltd for tariff concessions on certain power fuses, resulting in a duty-free status for these goods as of the date of application lodging, 25 October 2007.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0718292, under the Customs Act 1901, provide for the granting of tariff concessions on certain goods, specifically in this case, certain power fuses. Section 269F of the Act allows an application to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO), which can result in a lower rate of customs duty for the specified goods (section 269P(3)). The application process requires that no substitutable goods were produced in Australia on the day the application was lodged, as outlined in section 269C. This is further clarified in sections 269D, 269E, and 269B of the Act which define the terms 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', respectively. Once the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed on parties governed by this Act include the requirement for the CEO to consider applications for TCOs and to publish a notice in the Gazette when an application is accepted, inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). This is evident in the case of TCO No. 0718292, where the CEO published a notice in the Gazette inviting submissions but received none. Additionally, the CEO must ensure that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration to the extent that it would disadvantage that person or impose liabilities in respect of anything done or omitted before the date of registration (subsection 269S(1)).
In terms of consequences for breach, the Act does not specify any offences, penalties, or civil/criminal consequences for failing to comply with the requirements set out in the Act. However, it is implied that any misuse of the tariff concession provisions or improper application for a TCO could lead to legal action. The Act’s focus is on facilitating the tariff concession process in a way that is fair and transparent, ensuring that the rights of importers are protected and that the concessions granted are not abused.