EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0800796
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.
John Holland Pty Ltd applied for a TCO in respect of certain concrete segment moulds on 14 January 2008.
Instrument
TCO No 0800796 was made on 28 March 2008. It declares that those certain concrete segment moulds 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. 0800796 is taken to have come into force on 14 January 2008.
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 to provide for the administration of the customs and excise duties, and to establish a framework for the regulation of imports and exports. Part XVA of the Act introduced the scheme for Tariff Concession Orders (TCOs) to provide temporary relief from customs duty on specific goods under certain conditions, aiming to address economic and trade policy objectives. This legislative framework was designed to facilitate the importation of goods that are not produced domestically, thereby supporting industries and consumers by potentially lowering costs and increasing availability. The Tariff Concession Instrument No. 0800796, enacted in 2008, exemplifies this process by applying to concrete segment moulds, setting the duty rate at free, which was previously at 5%, following an application by John Holland Pty Ltd. The instrument was introduced without any submissions opposing it, reflecting the perceived alignment with the policy objectives of the Customs Act.
Scope and Application
The Customs Act 1901, through Part XVA, enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that apply lower rates of customs duty to specified goods. This process applies to any person who can demonstrate that the goods for which a TCO is sought are not substitutable with any goods produced in Australia in the ordinary course of business, as per section 269C of the Act. The TCOs have a national reach within Australia and are intended to benefit importers by reducing their duty obligations. However, goods listed in section 269SJ of the Act, which are ineligible for TCOs, are excluded from this scheme. The scope of the Act can be further refined through subordinate instruments that may set additional criteria or conditions for TCOs. The application by John Holland Pty Ltd for a TCO on concrete segment moulds, accepted and issued as TCO No. 0800796, exemplifies the application of this legislation, providing a tariff concession that effectively reduces the duty from 5% to free for these specific goods.
Key Provisions
The Customs Act 1901, as referenced in the Explanatory Statement for Tariff Concession Instrument No. 0800796, introduces a scheme through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). A TCO provides for a lower rate of customs duty on specific goods. The operative sections involved include section 269F, which allows a person to apply for a TCO in respect of goods, and section 269C, which outlines the core criteria that a TCO application must meet. According to section 269C, a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations under the Act require the CEO to consider applications for TCOs and ensure they meet the core criteria set out in section 269C. Once an application is accepted, the CEO must publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to submit their views (subsection 269K(1)). This ensures a degree of transparency and public consultation. In the case of TCO No. 0800796, the CEO found that the application by John Holland Pty Ltd met the core criteria, as no substitutable goods were produced in Australia, and subsequently issued the TCO on 28 March 2008.
The Act imposes specific requirements on parties involved in the TCO process. The applicant must ensure their application is valid and meets the core criteria outlined in section 269C. The CEO, on the other hand, must review the application, consult if necessary, and make a decision based on the information provided. Additionally, the CEO must ensure the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person in respect of actions taken before the TCO's effective date.
In terms of consequences, the Act does not specify particular offences or penalties for failing to comply with the requirements for issuing a TCO. However, it is implicit that any failure to adhere to the prescribed process could lead to legal challenges regarding the validity of the TCO. For example, if the CEO issues a TCO without properly considering the core criteria, the order could be subject to judicial review, potentially leading to its invalidation. There are no specific maximum penalties outlined in the explanatory statement, but any legal repercussions would likely depend on the specific circumstances and the outcome of any ensuing legal proceedings.