EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802785
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.
Bayford Group Pty Ltd applied for a TCO in respect of certain mobile jacks on 18 February 2008.
Instrument
TCO No 0802785 was made on 28 April 2008. It declares that those certain mobile jacks 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. 0802785 is taken to have come into force on 18 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the regulation of customs and excise duties, including the mechanism for Tariff Concession Orders (TCOs). The Tariff Concession Instrument No. 0802785, issued under this Act, was introduced to address the specific needs of businesses seeking to reduce customs duty on certain goods, provided certain conditions are met. The primary policy objective of this legislation is to facilitate trade by lowering the cost of imported goods, thereby potentially enhancing competitiveness and encouraging economic activity. The instrument allows for tariff concessions to be granted when no substitutable goods are produced in Australia, as determined by the Chief Executive Officer of Customs. This particular concession, applied to certain mobile jacks, resulted in a reduction of the duty rate from 5% to free, effective from the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0802785, under the Customs Act 1901, applies to the entity that has applied for the concession, in this case Bayford Group Pty Ltd, and to the goods specified in the Instrument, namely certain mobile jacks. The Act allows for the Chief Executive Officer of Customs to make Tariff Concession Orders that lower the rate of customs duty on goods, provided that the application meets the core criteria set out in the Act. These criteria include that no substitutable goods are produced in Australia in the ordinary course of business. The Instrument was made effective from the date the application was lodged, 18 February 2008, and it has a national reach as it is an instrument under Commonwealth legislation. The Instrument does not disadvantage any person by imposing liabilities for actions taken before its registration, and it benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the concession. The application of the Instrument may be extended or restricted through subordinate instruments as authorised by the Customs Act 1901.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0802785 under the Customs Act 1901 (section 269F) and Customs Tariff Act 1995 (Schedule 4) establish a framework for Tariff Concession Orders (TCOs). A TCO can be applied for by any person to the Chief Executive Officer (CEO) of Customs (section 269F). If the CEO is satisfied that the application meets the core criteria (section 269C) and that the goods specified in section 269SJ of the Act are not involved, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Tariff (subsection 269P(3)). For instance, in this case, certain mobile jacks are subject to item 50 of Schedule 4, which provides a duty-free rate.
The obligations and requirements imposed by the Act on the parties or entities it governs include the CEO's duty to assess TCO applications against the core criteria. The CEO must ensure that the application does not involve goods specified in section 269SJ and must verify that no substitutable goods were produced in Australia at the time of application. Once the CEO is satisfied that the application meets these criteria, they must issue a TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit their reasons (subsection 269K(1)). This ensures transparency and allows for any objections to be heard before the TCO is issued.
In terms of offences, penalties, or consequences for breach, the Act does not specify any criminal penalties for non-compliance with the TCO provisions. However, any actions that contravene the conditions set out in a TCO could lead to civil consequences, such as the imposition of duties or fines if the goods are found not to meet the criteria for the concession. The Act also ensures that the TCO does not affect the rights of any person as at the date of registration in a way that disadvantages them or imposes liabilities for actions taken before the TCO came into effect. This protects the interests of all parties involved and ensures that the TCO only applies prospectively from the date it was lodged.