EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802637
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.
Skema Holdings applied for a TCO in respect of certain bin axles on 14 February 2008.
Instrument
TCO No 0802637 was made on 18 April 2008. It declares that those certain bin axles 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. 0802637 is taken to have come into force on 14 February 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 Tariff Concession Instrument No. 0802637, enacted under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods that are not produced domestically and thus face higher customs duties. Enacted by the Australian Parliament, the policy objective behind this instrument is to reduce the cost of imported goods by applying a lower rate of customs duty, thereby promoting economic efficiency and competitiveness. The instrument was introduced in response to applications like the one from Skema Holdings for certain bin axles, ensuring that these goods benefit from a reduced duty rate of 0% instead of the general rate of 5%, provided no substitutable goods are produced in Australia. This measure facilitates smoother trade and potentially lowers the cost of these goods for consumers and businesses, aligning with broader economic policies aimed at supporting industry and consumer markets.
Scope and Application
The Tariff Concession Instrument No. 0802637 applies to the specific goods identified in the instrument, namely certain bin axles, as per the application made by Skema Holdings. The Act under which this instrument was created is the Customs Act 1901, specifically within Part XVA, which governs the scheme for Tariff Concession Orders (TCOs). The application for a TCO is addressed to the Chief Executive Officer of Customs, who evaluates whether the application meets the core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business. This instrument, therefore, applies to those particular bin axles that meet the specified conditions, and it directly impacts importers of these goods by providing them with a reduced rate of customs duty, in this case, from 5% to free of charge.
The instrument's reach is national, as it falls under the purview of Commonwealth legislation. There are exclusions for goods specified in section 269SJ of the Customs Act 1901, which lists those goods that cannot be subject to a TCO. The instrument also extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the tariff items applicable to the goods in question. The instrument does not disadvantage any person other than the Commonwealth and does not impose any new liabilities, although it does confer benefits on importers who can now apply for refunds on duty paid on these goods since the effective date of the TCO.
Key Provisions
The key operative sections of this legislation are sections 269F, 269C, 269B, 269D, 269E, 269P and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of certain goods. Section 269C provides that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269B, 269D and 269E define key terms used in the legislation such as "goods produced in Australia", "ordinary course of business" and "substitutable goods". If the CEO is satisfied that the application meets the core criteria, section 269P requires that a TCO be made. Section 269S states that a TCO is taken to have come into force on the day on which the application for the TCO was lodged.
The Act imposes obligations on the CEO of Customs to consider applications for a TCO and determine if they meet the core criteria in section 269C. The CEO must also publish a notice in the Gazette inviting submissions if there are reasons why the TCO should not be made (section 269K). Skema Holdings had the obligation to apply for a TCO if they wished to obtain a lower rate of duty on the specified bin axles. Importers of the goods will have the obligation to apply for a refund of duty on goods imported since the TCO came into force under regulation 126(1)(r).
There are no specific offences, penalties or consequences for breach outlined in the legislation. However, if a TCO is made in error, the CEO may revoke or vary the TCO (section 269T). The legislation does not impose any liabilities on any person and does not affect the rights of a person as at the date of registration. The rights of importers will be beneficially affected as they will be able to apply for a refund of duty on goods imported since the TCO came into force.