EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803237
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.
Jennmar Australia Pty Ltd applied for a TCO in respect of certain high pressure transfer systems on 11 April 2008.
Instrument
TCO No 0803237 was made on 4 July 2008. It declares that those certain high pressure transfer systems 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. 0803237 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 Australian Parliament, includes provisions for the creation of Tariff Concession Orders (TCOs) under its Part XVA. These orders are designed to provide lower rates of customs duty on specific goods, aiming to stimulate trade and reduce costs for importers. The policy objective is to ensure that Australian consumers and businesses benefit from reduced prices on imported goods, provided that no equivalent goods are produced domestically. This mechanism addresses a gap by allowing the Chief Executive Officer of Customs to make TCOs based on applications, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. This legislative framework ensures that the application process for tariff concessions is transparent, with an opportunity for public submissions before the final decision is made. The concession applies retroactively from the date the application was lodged, ensuring that importers are not disadvantaged by the process.
Scope and Application
The Tariff Concession Instrument No. 0803237, issued under Part XVA of the Customs Act 1901, applies specifically to the goods identified in the Instrument, namely certain high-pressure transfer systems. This legislation allows for the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, effectively reducing the customs duty on these specified goods to zero. The Act applies to any person who meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. The Instrument is applicable across Australia and operates within the broader framework of the Customs Act 1901 and the Customs Tariff Act 1995. It is important to note that the TCO does not retroactively affect the rights of any person or impose new liabilities, ensuring that it only benefits those who import the goods after the Instrument's effective date. The Instrument came into force on the day the application was lodged, 11 April 2008, and no submissions were received in opposition to the TCO.
Key Provisions
The main operative sections of this legislation include section 269C, which specifies that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged, and section 269P(3), which mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that a TCO application meets the core criteria, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The instrument, TCO No. 0803237, was made on 4 July 2008 and declared that certain high pressure transfer systems are goods to which item 50 of Schedule 4 applies since the CEO was satisfied that no substitutable goods were produced in Australia.
The obligations and requirements imposed by this Act include the requirement for the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO. In this case, the CEO did not receive any submissions in response to this invitation. The Act also stipulates that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. 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 day on which the TCO is taken to have come into force.
Any breach of the provisions set out in this Act may result in various civil or criminal consequences. However, the specific offences, penalties, or consequences are not detailed within the text of this legislation. The Act does clarify that a 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. It is important to note that the TCO does not impose any liabilities on any person.