EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803012
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.
Tarrone Pty Ltd applied for a TCO in respect of certain solid fuel hot water furnace on 21 February 2008.
Instrument
TCO No 0803012 was made on 16 May 2008. It declares that those certain solid fuel hot water furnaces 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. 0803012 is taken to have come into force on 21 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 imposition of customs duty on imported goods. This Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which reduce the duty rate for specific goods under certain conditions. The problem this legislation addresses is the need to provide economic benefits to industries by lowering the customs duty on particular goods, thus facilitating the importation of these goods and potentially aiding local businesses that rely on such imports. The policy objective is to ensure that the Australian economy can benefit from competitive pricing of imported goods, thereby encouraging trade and industry growth without unduly burdening the federal budget through high customs duties. The explanatory statement for Tariff Concession Instrument No. 0803012, issued under this Act, details the application by Tarrone Pty Ltd for a concession on certain solid fuel hot water furnaces, which was approved due to the absence of Australian-produced alternatives, thus meeting the core criteria set out in the Act.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty on certain goods. An individual or entity can apply for a TCO if the goods in question are not specified in section 269SJ of the Act, which lists items ineligible for tariff concessions. A TCO application is considered valid if no substitutable goods are produced in Australia on the date the application is lodged, according to section 269C of the Act. The CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the TCO application, though in practice, no submissions were received. The TCO comes into effect on the date the application is lodged, and it does not affect existing rights or impose liabilities on any person, except it provides beneficial rights to importers who can apply for duty refunds on goods imported since the TCO's effective date. The CEO's decision to grant a TCO is supported by subordinate instruments under the Customs Tariff Act 1995, which specify the applicable duty rates.
Key Provisions
The main operative sections of this legislation, specifically sections 269C, 269B, 269D, 269E, and 269P of the Customs Act 1901, outline the conditions and criteria for Tariff Concession Orders (TCOs). Section 269C sets out the core criteria that must be met for a TCO application to be considered valid, which includes ensuring that no substitutable goods are produced in Australia on the day the application is lodged (section 269C). This is defined by sections 269B and 269D, which explain terms such as "goods produced in Australia" and "ordinary course of business." If the Chief Executive Officer of Customs (CEO) is satisfied that these criteria are met, they must make a written order under section 269P(3) declaring that the goods in question are subject to a TCO, which allows for a lower rate of customs duty to apply.
The obligations imposed by this Act on the parties involved include the requirement for applicants to ensure their TCO applications meet the core criteria as outlined in the Act, specifically ensuring no substitutable goods are produced in Australia. The CEO must also fulfill the obligation to make a TCO if the application meets the core criteria and to publish a notice in the Gazette inviting submissions from any interested parties. Additionally, the CEO must ensure that the TCO does not affect any pre-existing rights or impose any liabilities on any person other than the Commonwealth.
There are no specific offences, penalties, or civil/criminal consequences mentioned for breach of the Act in this context. However, the legislation ensures that the rights of importers are protected and beneficially affected by the TCO, allowing them to apply for a refund of duty on goods imported since the date the TCO is deemed to have come into force. The TCO also explicitly states that it does not impose any liabilities on any person, thereby maintaining a clear legal framework for the application and implementation of TCOs.