EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804335
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.
Super Cheap Auto Pty Ltd applied for a TCO in respect of certain air spray guns on 16 April 2008.
Instrument
TCO No 0804335 was made on 11 July 2008. It declares that those certain air spray guns 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. 0804335 is taken to have come into force on 16 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 Tariff Concession Instrument No. 0804335, enacted in 2008, is a regulation under the Customs Act 1901. It was introduced to address the need for streamlined processes in granting tariff concessions for certain imported goods. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower the rate of customs duty on specified goods. This regulation was enacted by the relevant executive authority under the authority of the Customs Act, aiming to facilitate trade by reducing the duty on specific imported items, thereby encouraging their availability and use in the Australian market.
Super Cheap Auto Pty Ltd applied for this tariff concession on certain air spray guns, and the regulation was made following the CEO’s determination that no substitutable goods were produced in Australia. This decision led to a tariff reduction from the general rate of 5% to a free rate for these goods, effective from the date the application was lodged. This legislative instrument ensures that the rights of importers are positively impacted, allowing them to apply for refunds of duty paid on these goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0804335 applies to specific goods that are the subject of an application for a Tariff Concession Order (TCO) under the Customs Act 1901. This Act enables the Chief Executive Officer of Customs to grant tariff concessions on certain goods, which may include reduced customs duty rates or exemptions. The application process requires the CEO to consider whether the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D of the Act. The scope of the TCO is limited to the goods specified in the application, and it does not extend to any goods that are explicitly excluded under section 269SJ. The instrument applies nationally, given its basis in Commonwealth legislation, and it became effective on the date the application was lodged, as per subsection 269S(1) of the Act. The TCO does not retroactively disadvantage any party or impose liabilities for actions taken prior to its effective date, and it specifically benefits importers by potentially allowing them to claim duty refunds for goods imported since the commencement date.
Key Provisions
The Tariff Concession Instrument No. 0804335, issued under the Customs Act 1901, primarily concerns the application of reduced customs duties to certain air spray guns. According to section 269P(3) of the Act, if the Chief Executive Officer of Customs (CEO) determines that an application for a Tariff Concession Order (TCO) meets the specified core criteria, they are obligated to issue a written order that reduces the customs duty on the goods in question. In this case, the CEO found that the application by Super Cheap Auto Pty Ltd for certain air spray guns met the criteria, as no substitutable goods were produced in Australia. Consequently, item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, which sets the rate of duty for these goods at free, down from the general rate of 5%.
Under the Customs Act 1901, section 269K(1) imposes an obligation on the CEO to publish a notice in the Gazette once a TCO application is accepted as valid. This notice includes an invitation for any interested party to lodge submissions if they believe the TCO should not be granted. In this instance, no submissions were received in response to the published notice, indicating that no objections were raised against the TCO. The TCO, as per subsection 269S(1) of the Act, is considered to have come into force on the day the application was lodged, which was 16 April 2008. It is important to note that this TCO does not affect any pre-existing rights of persons other than the Commonwealth, nor does it impose any new liabilities.
The Act and the accompanying Regulations, such as paragraph 126(1)(r), provide further clarity on the implications of the TCO. Specifically, importers of the affected goods can apply for a refund of duty on those goods imported since the TCO came into effect. This provision ensures that the rights of importers are beneficially affected, while no new liabilities are imposed on any party. This legislative framework ensures that the application process for TCOs is transparent and allows for public input, while also protecting the interests of those who may be affected by the concession.