EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804820
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 pvc or polyurethane hose on 22 April 2008.
Instrument
TCO No 0804820 was made on 18 July 2008. It declares that those certain pvc or polyurethane hoses 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. 0804820 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 Tariff Concession Instrument No. 0804820 was enacted in 2008 under the Customs Act 1901 to address the need for a lower rate of customs duty for certain goods, in this case, certain PVC or polyurethane hoses, which Dixon Asia Pacific had applied for. This Instrument was introduced to provide tariff concessions for specific goods that were not being produced in Australia at the time, thus ensuring that no domestic production was adversely affected by the concession. The instrument was created to streamline the application process for tariff concessions and to provide clarity on the duty rates applicable to the specified goods. The Tariff Concession Order was made by the Chief Executive Officer of Customs, who was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria outlined in the Act. The tariff concession aims to facilitate trade by reducing the duty on these specific goods, thereby benefiting importers and potentially stimulating demand in the market.
Scope and Application
The Customs Act 1901, as applied through Tariff Concession Instrument No. 0804820, establishes a framework whereby the Chief Executive Officer of Customs (CEO) can grant Tariff Concession Orders (TCOs) that provide a lower rate of customs duty on specified goods. This Act applies to entities or individuals who seek to import goods into Australia and wish to benefit from the reduced customs duty rates available under a TCO. The scope of this Act is national, operating within the Commonwealth jurisdiction, and it does not specify exclusions or exemptions beyond the goods outlined in section 269SJ of the Act, which lists those goods ineligible for TCOs. This legislation extends its application through subordinate instruments such as the Tariff Concession Orders themselves, which specify the goods eligible for duty concessions and the conditions under which these concessions are granted. The CEO’s decision to grant a TCO hinges on whether the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business, as outlined in section 269C of the Act.
Key Provisions
The main operative sections of the Customs Act 1901 that apply to Tariff Concession Orders (TCOs) include sections 269C (1) (section 269C of the Act), 269F (section 269F of the Act), and 269P (3) (subsection 269P(3) of the Act). Section 269C(1) specifies that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. Subsection 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, the CEO 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 obligations and requirements imposed by the Act on the parties it governs include the necessity for the CEO to determine whether a TCO application meets the core criteria by verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must also make a written order if satisfied that the application meets these criteria. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made. This notice must be published as soon as practicable after accepting a TCO application as a valid application.
In terms of offences, penalties, or consequences for breach, the Act does not explicitly detail specific penalties for non-compliance with the TCO provisions. However, failure to comply with the requirements for making a TCO could result in the goods not being eligible for the lower rate of customs duty, potentially leading to higher import costs for the applicant. Additionally, if the CEO does not adhere to the statutory requirements for publishing notices and considering submissions, there could be procedural challenges or legal disputes regarding the validity of the TCO. The implications of these non-compliances are largely administrative and financial rather than penal in nature.