EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721764
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.
Macwil Roxtec Pty Limited applied for a TCO in respect of certain sealing modules on 19 December 2007.
Instrument
TCO No 0721764 was made on 07 March 2008. It declares that those certain sealing modules 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 10%. 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. 0721764 is taken to have come into force on 19 December 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. 0721764, enacted under the Customs Act 1901, addresses the need for tariff concessions on specific goods where no substitutable domestic production exists. This instrument was introduced by the Parliament of Australia to provide relief to businesses that rely on importing certain goods for their operations, ensuring they are not at a competitive disadvantage due to high customs duties. The policy objective is to facilitate trade by reducing the cost of importing specific goods, thereby promoting economic efficiency and competitiveness. The instrument allows the Chief Executive Officer of Customs to issue a Tariff Concession Order (TCO) if no substitutable goods are produced in Australia, which in this case led to the sealing modules being subject to a zero rate of customs duty. This legislative measure ensures that the rights of importers are protected, allowing them to apply for duty refunds on goods imported since the TCO was taken to have come into force.
Scope and Application
The Tariff Concession Instrument No. 0721764, made under the Customs Act 1901, applies to individuals or entities that have applied for and been granted a Tariff Concession Order (TCO) for specific goods. In this instance, the legislation concerns Macwil Roxtec Pty Limited’s application for a TCO for certain sealing modules. The Act allows the Chief Executive Officer of Customs to grant such concessions if certain conditions are met, primarily that no substitutable goods are produced in Australia. This TCO provides for the sealing modules to be subject to a free rate of duty instead of the general rate of 10%. The application of this legislation is national in scope, as it pertains to the Customs Act 1901, which is a Commonwealth Act. The TCO does not affect any pre-existing rights or liabilities of individuals or entities, except to the beneficial effect of allowing importers to apply for duty refunds on goods imported since the TCO came into effect. Notably, the Act excludes certain goods from being subject to a TCO, as specified in section 269SJ of the Act, which are not detailed in the explanatory statement but would be relevant in other applications.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0721764 under the Customs Act 1901 (the Act) are sections 269C, 269B, 269E, 269F, 269P(3), and 269SJ. Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of specific goods. Section 269C specifies that the application meets the core criteria if, on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business, as defined in section 269B and section 269E. Section 269P(3) mandates that if the CEO is satisfied the application meets these criteria, they must make a written order, declaring the goods subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Finally, section 269SJ lists goods that cannot be the subject of a TCO.
The Act imposes several obligations and requirements on the parties involved. When an application for a TCO is lodged under section 269F, the CEO must decide whether the application meets the core criteria. If satisfied, the CEO must make a written order as per section 269P(3). The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as stipulated in subsection 269K(1). The CEO must consider these submissions before making a final decision.
Section 269SJ of the Act outlines the goods that cannot be the subject of a TCO. These include goods specified in this section, which are generally those that are prohibited or restricted under Australian law. Furthermore, the Act ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO as per subsection 269S(1). Importers can benefit from the TCO by applying for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations.
Under the Customs Act 1901, there are no specific offences, penalties, or civil/criminal consequences outlined in the Act for breach of the TCO provisions. However, non-compliance with the tariff concessions or failure to adhere to the terms set out in the TCO may result in administrative actions by the CEO. This could include the imposition of duties on goods that do not meet the criteria for tariff concessions, or the denial of refund applications for duties paid on goods that are subsequently found not to qualify for concessions. It is essential for applicants and importers to ensure their compliance with the conditions specified in the TCO to avoid such administrative consequences.