EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719915
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.
Jord International Pty Limited applied for a TCO in respect of certain filter press parts on 23 November 2007.
Instrument
TCO No 0719915 was made on 08 February 2008. It declares that those certain filter press 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. 0719915 is taken to have come into force on 23 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 was enacted by the Parliament of Australia to regulate customs and border control and includes provisions for Tariff Concession Orders (TCOs). This specific legislation, F2008L00440, was introduced to address the need for tariff concessions on certain imported goods. The problem or gap it aimed to fill is the potential for economic inefficiency or disadvantage if certain goods were not subject to tariff concessions, particularly where no Australian-made alternatives exist. The instrument, TCO No. 0719915, was made under section 269F of the Act by the Chief Executive Officer of Customs, who assessed the application from Jord International Pty Limited for tariff concessions on certain filter press parts. The CEO determined that no substitutable goods were produced in Australia, thereby satisfying the core criteria under section 269C of the Act. Consequently, the TCO reduced the customs duty on these goods from 5% to free, effective from the date the application was lodged, 23 November 2007. The policy objective is to facilitate trade by reducing the cost of importing goods that have no Australian-made equivalents, thereby potentially encouraging imports and economic activity.
Scope and Application
The Customs Act 1901, under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which can apply lower rates of customs duty on specific goods. This Act applies to any individual or entity seeking to import goods that qualify for a TCO, thereby directly affecting those involved in the importation and customs clearance of such goods. The geographic reach of the Act is national, as it operates under Australian law, with the CEO having the authority to grant concessions on a case-by-case basis for goods not produced in Australia and for which no suitable substitutes are available domestically. The Act explicitly excludes certain goods from eligibility for a TCO, as outlined in section 269SJ. The process of establishing a TCO involves an application by an interested party, assessment by the CEO against specific criteria, and publication for public comment, although in the case of TCO No. 0719915, no submissions were received. The commencement of a TCO is retroactive to the date of the application, ensuring that the benefits and duties apply from that initial date. This legislative framework ensures that the application and effects of TCOs are both clear and limited to specific cases where the economic rationale for concessions is evident.
Key Provisions
The primary operative sections of this legislation, specifically TCO No. 0719915, are detailed in sections 269C, 269F, 269P, and 269S of the Customs Act 1901 (section 269C). Section 269F allows for the application for a Tariff Concession Order (TCO) by any person to the Chief Executive Officer of Customs (CEO), provided the goods in question are not specified in section 269SJ, which lists goods ineligible for a TCO. Section 269C stipulates that the application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, a written TCO must be issued. Section 269S(1) specifies that the TCO takes effect from the date the application was lodged.
The obligations imposed on parties governed by this Act include ensuring that any TCO application is lodged in accordance with section 269F and that the goods specified do not fall under the ineligible category outlined in section 269SJ. The CEO, upon receiving a valid application, must assess whether the core criteria are met as per section 269C. If the criteria are satisfied, the CEO is required to issue a TCO as per section 269P(3). Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the proposed TCO. This publication must occur as soon as practicable after accepting the application as valid.
The legislation also outlines various consequences for breaches and non-compliance. If an entity fails to adhere to the requirements for applying for a TCO or if the CEO finds that the core criteria are not met, the application may be rejected. Such rejections could lead to the continuation of the higher rate of duty on the specified goods. Furthermore, section 269S(1) stipulates that the TCO does not affect the rights of any person as at the date of registration, thus safeguarding the rights of importers who may be eligible for a refund of duty paid on the goods under paragraph 126(1)(r) of the Regulations. However, it is important to note that the TCO does not impose any new liabilities on any person.