EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804816
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.
Dixon Asia Pacific applied for a TCO in respect of certain bronze or brass camlock fittings on 22 April 2008.
Instrument
TCO No 0804816 was made on 18 July 2008. It declares that those certain bronze or brass camlock fittings 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. 0804816 is taken to have come into force on 22 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 Parliament of Australia, addresses the need for a flexible tariff concession scheme to ensure that Australian industries and businesses can access goods at a reduced customs duty rate when no equivalent goods are produced domestically. This is achieved through Tariff Concession Orders (TCOs) which can be applied for by individuals or entities, and granted by the Chief Executive Officer of Customs if certain criteria are met. The problem this legislation aims to address is the potential for unfair trade practices when domestic production of specific goods is either non-existent or insufficient, which can lead to increased costs for businesses and consumers. The Tariff Concession Instrument No. 0804816, enacted in 2008, provides a practical solution by allowing for tariff concessions on certain bronze or brass camlock fittings, setting the duty rate at free as opposed to the general rate of 5%, thus facilitating more competitive market conditions and supporting economic efficiency.
Scope and Application
The Customs Act 1901, as amended through the Tariff Concession Instrument No. 0804816, applies to the concession of customs duties on certain imported goods, specifically bronze or brass camlock fittings in this instance. The Act applies to any person or entity seeking to import these goods, thereby directly affecting the importers and potentially wholesalers or retailers who may purchase these goods for resale. The geographic reach of the Act is national, as it pertains to the importation of goods into Australia, and the instrument is a Commonwealth regulation. The application of the Act extends to the specific goods mentioned, provided they meet the criteria for tariff concession and no substitutable goods are produced in Australia. The instrument also outlines that the concession does not disadvantage existing rights or impose new liabilities on any party other than the Commonwealth, ensuring that only future transactions are affected from the date of the application for the concession. This legislative framework allows for the dynamic adjustment of tariff rates based on market conditions and production capabilities within Australia, thus facilitating fair trade practices.
Key Provisions
The primary sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) are sections 269C, 269B, 269D, 269E, 269F, 269P, and 269S. Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO regarding specific goods. If the CEO determines that the application meets the core criteria outlined in section 269C, they must issue a TCO. This order declares that the goods in question are subject to a prescribed tariff item, thereby granting a lower rate of customs duty. Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269P(3) mandates the CEO to issue a written TCO if the application criteria are satisfied.
The Act imposes several obligations on both the applicant and the CEO. An applicant must ensure that the goods in question do not have substitutable alternatives produced in Australia at the time of application. The CEO is obligated to evaluate the application against the core criteria and, if satisfied, to publish a notice in the Gazette inviting any objections (subsection 269K(1)). If no objections are received, the CEO must proceed to issue the TCO. The TCO will then apply from the date the application was lodged (subsection 269S(1)). The Act also ensures that the TCO does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth.
There are specific consequences for breaches of the Act's provisions regarding TCOs. While the explanatory statement does not detail criminal or civil penalties, it is implied that any misuse or incorrect application of the TCO provisions could result in legal repercussions. For instance, if the CEO fails to follow the statutory requirements in issuing a TCO, or if an applicant provides false information, they could face legal action. The exact penalties would depend on the nature and severity of the breach, but they could include fines, imprisonment, or both, as per the general legal framework of Australia.
In the case of Dixon Asia Pacific's application for a TCO concerning certain bronze or brass camlock fittings, the CEO was satisfied that the application met the core criteria. Consequently, TCO No. 0804816 was issued, making the bronze or brass camlock fittings subject to a zero-rate duty instead of the general 5% duty. The TCO took effect from 22 April 2008, the date the application was lodged. Importantly, the TCO does not affect any pre-existing rights or impose liabilities on any person other than the Commonwealth. Importers of these goods can benefit by applying for a refund of duty on imports made since the TCO's effective date.