EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804740
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.
Australasian Industrial Marketing Services Pty Ltd applied for a TCO in respect of certain polishing media on 18 April 2008.
Instrument
TCO No 0804740 was made on 11 July 2008. It declares that those certain polishing media 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. 0804740 is taken to have come into force on 18 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, facilitates the reduction of customs duties on specific goods through the creation of Tariff Concession Orders (TCOs) under Part XVA. This legislative framework was designed to address the gap in providing tariff relief for imported goods that are not produced domestically, thereby promoting competitive market conditions and supporting economic objectives. The instrument in question, Tariff Concession Instrument No. 0804740, was introduced to provide a tariff concession for certain polishing media, recognising that no substitutable goods were produced in Australia, thus meeting the core criteria outlined in section 269C of the Act. The instrument came into effect on 18 April 2008, aligning with the date the application was lodged, and provides a zero percent duty rate on these specified goods, as opposed to the general rate of five percent. This initiative aims to benefit importers by potentially allowing them to apply for duty refunds on goods imported since the TCO's effective date, as per the Customs Tariff Regulations.
Scope and Application
The Tariff Concession Instrument No. 0804740 applies to goods specified in the instrument, namely certain polishing media, and to the entities that import these goods into Australia. The instrument is made under the Customs Act 1901, which is a Commonwealth Act and therefore has a national jurisdictional reach. The Act applies to any person who imports goods into Australia and seeks a tariff concession order. The instrument was made to facilitate the importation of these goods by providing a concessional rate of customs duty, which is free, as opposed to the general rate of 5%. The instrument does not apply to goods that are specified in section 269SJ of the Customs Act, which outlines those goods that cannot be subject to a tariff concession order. The scope of the instrument can be extended or restricted through subordinate instruments, such as regulations, which may provide further detail on the application of the tariff concession. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0804740 under the Customs Act 1901 (section 269F) require the Chief Executive Officer of Customs (CEO) to make a written order, or Tariff Concession Order (TCO), declaring that certain goods are subject to a lower rate of customs duty. This instrument was made in response to an application by Australasian Industrial Marketing Services Pty Ltd on 18 April 2008. The instrument, TCO No. 0804740, was issued on 11 July 2008, and it applies to certain polishing media that are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with the duty rate for these goods set at free, compared to the general rate of 5%.
The Act imposes certain obligations on the parties involved in the TCO process. For instance, any person can apply to the CEO for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO (section 269F). The CEO must assess whether the application meets the core criteria, which include determining that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged (section 269C). Additionally, once a TCO application is accepted as valid, the CEO must publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). This ensures transparency and allows for public consultation.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations can result in civil or criminal consequences. However, the explanatory statement does not specify the exact offences, penalties, or consequences for breach of the TCO provisions. It is important to note that the TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration in a way that disadvantages that person or imposes liabilities for anything done or omitted before the registration date (subsection 269S(1)). Importers, however, may benefit from applying for a refund of duty on goods imported since the day the TCO came into force under paragraph 126(1)(r) of the Regulations.