EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803215
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.
Govan Industries Pty Ltd applied for a TCO in respect of certain junction boxes on 11 April 2008.
Instrument
TCO No 0803215 was made on 04 July 2008. It declares that those certain junction boxes 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. 0803215 is taken to have come into force on 11 April 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 Commonwealth Parliament, addresses the need for a flexible scheme that allows for the granting of tariff concessions on certain imported goods. The Act establishes a framework under which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs), which reduce or eliminate customs duties on specified goods. This legislative initiative aims to support economic efficiency and competitiveness by providing relief on duties for goods that are not produced domestically or are not readily substitutable by local products. The explanatory statement for Tariff Concession Instrument No. 0803215, made on 4 July 2008, details the application of this scheme to certain junction boxes, where the application by Govan Industries Pty Ltd led to a tariff reduction from 5% to free, effective from 11 April 2008. This instrument was published in the Gazette with an invitation for submissions, none of which were received, thereby allowing the TCO to proceed without opposition.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply reduced rates of customs duty on specified goods. This Act applies to any person or entity that imports goods into Australia and seeks a reduction in customs duty through the application for a TCO. The geographic reach of the Act is national, as it pertains to customs duties across Australia. The Act stipulates that TCOs cannot be applied to certain goods as outlined in section 269SJ, which excludes specific items from tariff concessions. An application for a TCO is assessed against core criteria, notably the absence of substitutable goods produced in Australia as per section 269C. Once the application meets these criteria and no objections are raised, the CEO issues a written TCO. For instance, Tariff Concession Instrument No. 0803215, issued on 4 July 2008, applies a zero rate of duty to certain junction boxes as of 11 April 2008, the date the application was lodged. The Act ensures that the TCO does not disadvantage any person by affecting their rights as they stood before the registration of the concession.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0803215 under the Customs Act 1901 pertain to the establishment of tariff concessions for certain goods. Specifically, section 269F allows for applications to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) concerning goods that do not fall under the prohibited category listed in section 269SJ. If the CEO determines that the application meets the core criteria outlined in section 269C, which essentially requires that no substitutable goods are produced in Australia, they are mandated to issue a TCO under section 269P(3). This order declares that the specified goods are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, with a rate of duty as specified. In this case, certain junction boxes are subject to item 50 of Schedule 4, with the general rate of duty being 5%, but the TCO grants a free rate of duty for these goods.
The obligations imposed by the Act on the parties involved are primarily centred around the application and assessment process. The applicant must ensure that the goods in question meet the criteria for a TCO, particularly that no substitutable goods are produced in Australia. The CEO, on the other hand, has the responsibility to review the application, determine whether it meets the core criteria, and if so, to issue a TCO. Additionally, the CEO is required under section 269K(1) to publish a notice in the Gazette inviting submissions from any interested parties who might oppose the granting of the TCO. In this instance, no submissions were received, facilitating the issuance of TCO No. 0803215.
Regarding offences, penalties, or consequences for breach, the Act does not explicitly outline penalties for non-compliance with the TCO provisions. However, it is important to note that the Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO. Importers of the affected goods will have the right to apply for a refund of duty on goods imported since the TCO came into effect, as stipulated under paragraph 126(1)(r) of the Regulations. There are no liabilities imposed on any person by the TCO, further underscoring the protection of third-party interests. The main focus is on ensuring the correct application and benefit of tariff concessions without imposing undue burdens or liabilities on affected parties.