EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803929
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.
Multix Proprietary Limited applied for a TCO in respect of certain 0803929 on 11 March 2008.
Instrument
TCO No 0803929 was made on 04 June 2008. It declares that those certain oven and or griller parts 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. 0803929 is taken to have come into force on 11 March 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. The Tariff Concession Instrument No. 0803929 was introduced to address the specific problem of ensuring that Australian industries remain competitive by allowing the importation of certain goods without incurring customs duty, provided these goods are not being produced domestically in a way that could substitute for the imported goods. This instrument allows the Chief Executive Officer of Customs to make Tariff Concession Orders, which apply a lower rate of customs duty or even a free rate to specified goods if it is determined that no substitutable goods are produced in Australia. This policy objective is to support Australian businesses by reducing the cost of imported raw materials or components necessary for production, thereby enhancing their competitiveness in both domestic and international markets.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs) that provide a reduced rate of customs duty on particular goods. This legislation applies to any person who submits an application for a TCO under section 269F, provided the goods in question do not fall within the exclusions outlined in section 269SJ. A TCO can be issued if the CEO determines that the application meets the core criteria, notably that no substitutable goods are being produced in Australia in the ordinary course of business, as per section 269C. The application process involves an invitation for submissions from any interested parties, although in this instance, no objections were lodged. The TCO is deemed to come into effect on the date the application was lodged, which for TCO No. 0803929, is 11 March 2008. This TCO specifically pertains to certain oven and griller parts, granting them a zero rate of duty, which contrasts with the general rate of 5%. The TCO does not retroactively affect the rights of any person, nor does it impose new liabilities, thereby ensuring that only the rights of importers are positively impacted, allowing them to apply for refunds on duties paid prior to the effective date of the TCO.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) which can be applied to certain goods by the Chief Executive Officer of Customs (CEO) (sections 269C, 269F, 269SJ). Section 269C mandates that a TCO application must meet the core criteria, which include the absence of substitutable goods produced in Australia on the date the application was lodged. The CEO must make a TCO if the application meets these criteria, as outlined in section 269P(3), specifying the reduced customs duty rate applicable to the goods.
The obligations imposed on the parties governed by this Act involve ensuring that applications for TCOs are made in accordance with the criteria set out in section 269C, and that the CEO assesses these applications appropriately. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties who might have reasons to oppose the making of a TCO. The CEO must consider any submissions received in determining whether to proceed with the TCO.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs could result in legal consequences. Although the explanatory statement does not detail specific offences or penalties, breaches of the Act could potentially lead to civil or criminal liabilities, depending on the nature and extent of the breach. The precise penalties would be determined by the courts, considering the particular circumstances of the breach and the provisions of the relevant legislation.
The explanatory statement indicates that TCO No. 0803929 was registered on 11 March 2008, and it applies to certain oven and griller parts, reducing the duty rate from 5% to free. Importantly, this TCO does not disadvantage any person other than the Commonwealth or impose any new liabilities on any person (section 269S(1)). Importers of these goods can apply for a refund of duties paid on imports since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.