EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719351
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.
Boral Formwork and Scaffolding Pty Limited applied for a TCO in respect of certain soldier system components on 13 November 2007.
Instrument
TCO No 0719351 was made on 29 January 2008. It declares that those certain soldier system 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 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. 0719351 is taken to have come into force on 13 November 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, provides for a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This scheme was designed to address the problem of imposing lower rates of customs duty on specific goods that are not produced domestically, thus promoting trade and economic efficiency. TCO No. 0719351, issued on 29 January 2008, is an instrument that applies to certain soldier system components, offering a tariff concession by setting the duty rate at free, as no substitutable goods were produced in Australia at the time of application. This instrument aims to benefit importers by potentially allowing them to claim refunds of duty on goods imported since the effective date of the TCO, 13 November 2007, without imposing any liabilities on non-Commonwealth entities.
Scope and Application
The Customs Act 1901, under Part XVA, provides for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking a reduction in customs duty on specific goods by applying for a TCO. These concessions are granted if the goods in question are not produced in Australia in the ordinary course of business and there are no substitutable goods available domestically, as defined under the Act. The geographic reach of this legislation is national, as it operates within the framework of Australian customs laws. However, certain goods specified in section 269SJ of the Act are excluded from TCOs. The Act allows for the extension or restriction of its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the duty rates applicable to goods under various schedule items. For example, TCO No. 0719351, concerning soldier system components, was issued under this legislative framework, resulting in a tariff concession that reduced the duty from 5% to free for the specified goods.
Key Provisions
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0719351, outlines a process for granting tariff concessions on specific goods through Tariff Concession Orders (TCOs). Under this instrument, a TCO can be applied for by any person and, if approved, will result in a lower rate of customs duty for the goods in question. Section 269F of the Act details the application process, whereby an applicant must satisfy the Chief Executive Officer of Customs (CEO) that the goods in question are eligible for a concession and are not listed in section 269SJ, which prohibits certain goods from receiving a TCO. If the CEO is satisfied that the application meets the core criteria, primarily that no substitutable goods were produced in Australia on the date of the application (as defined by sections 269C, 269D, and 269E of the Act), they must issue a written TCO. This is demonstrated in the case of Boral Formwork and Scaffolding Pty Limited, whose application for a TCO on certain soldier system components was approved, and the resulting TCO declared these components eligible for a free rate of duty, down from the general rate of 5%.
The obligations imposed by the Act on the parties involved are primarily on the CEO, who must ensure that any TCO application meets the core criteria before issuing an order. The CEO must also, as per subsection 269K(1), publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO. In the case of TCO No. 0719351, no submissions were received. The Act ensures that the TCO does not affect any existing rights of non-Commonwealth parties, nor does it impose any new liabilities on them. Instead, it provides potential benefits to importers by allowing them to apply for a refund of duty on goods imported since the TCO was taken to have come into force.
The Act does not explicitly detail specific offences or penalties for breaches of the TCO provisions. However, general principles of administrative law and the inherent authority of the CEO to ensure compliance with the Act would apply. Breaches could potentially lead to legal actions for enforcement, review, or rectification of the TCO under the Administrative Decisions (Judicial Review) Act 1977. Additionally, if any party misuses the TCO by importing goods not eligible for the concession, they could face penalties under the Customs Act 1901 for incorrect classification or fraudulent claims, which could include fines or other civil penalties as prescribed by the Act.