EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804834
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) Pty Ltd applied for a TCO in respect of certain coupling fittings on 22 April 2008.
Instrument
TCO No 0804834 was made on 18 July 2008. It declares that those certain coupling 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. 0804834 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 Australian Parliament, provides a framework for the regulation of imports and exports, including the imposition of customs duties on goods. To address specific economic and trade policy needs, the Act includes provisions for the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can reduce or eliminate customs duty on certain goods. The Tariff Concession Instrument No. 0804834 was introduced to provide tariff concessions for certain coupling fittings, following an application by Dixon (Asia Pacific) Pty Ltd on 22 April 2008. This instrument was made on 18 July 2008 and declares that the specified coupling fittings are subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, provided no substitutable goods are produced in Australia. The policy objective of this measure is to potentially stimulate economic activity by reducing the cost of importing these specific goods. The instrument was published in the Gazette with an invitation for submissions, none of which were received, and it came into effect on the date of the application lodging.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0804834, applies to any person or entity seeking tariff concessions on goods imported into Australia. Specifically, it pertains to those who apply for Tariff Concession Orders (TCO) from the Chief Executive Officer of Customs, provided the goods in question are not specified in section 269SJ of the Act, which outlines goods ineligible for tariff concessions. The legislation is of Commonwealth reach and applies nationally across Australia. The application process for a TCO involves meeting the core criteria, as defined in sections 269C and 269B of the Act, which require that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. If these criteria are met, the CEO must issue a TCO, which grants a lower rate of customs duty on the specified goods. The TCO in question, which applies to certain coupling fittings, came into force on the date of the application, 22 April 2008, and provides a duty-free rate for these goods, which previously had a general duty rate of 5%.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0804834, under the Customs Act 1901 (section 269F), require the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) if certain conditions are met. Specifically, if an application for a TCO is made for goods that are not specified in section 269SJ of the Act (section 269F), the CEO must decide whether the application meets the core criteria set out in section 269C of the Act. The core criteria are satisfied if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). If the CEO is satisfied that these criteria are met, they must make a written order (section 269P(3)).
The obligations imposed on the parties by this Act include the requirement for the CEO to assess whether an application for a TCO meets the core criteria. This involves determining whether the goods in question are substitutable and whether any such goods were produced in Australia on the day the application was lodged. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). In this case, no submissions were received. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on a person in respect of anything done or omitted before the date of registration (subsection 269S(1)).
In terms of consequences for breach, the Act does not explicitly outline offences or penalties for failing to comply with the requirements of a TCO. However, any failure by the CEO to properly assess applications or to publish notices and invitations for submissions could potentially lead to legal challenges or administrative penalties if it is found that the process was not followed correctly. The Act ensures that the rights of importers are beneficially affected and that they can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. Importantly, the TCO does not impose any liabilities on any person, as per the terms outlined in the Act.