EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0808968
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.
Supercheap Auto Group applied for a TCO in respect of certain aluminium cases on 20 May 2008.
Instrument
TCO No 0808968 was made on 08 August 2008. It declares that those certain aluminium cases 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. 0808968 is taken to have come into force on 20 May 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 was enacted by the Australian Parliament to regulate the importation and exportation of goods, including the imposition of customs duties. Part XVA of this Act provides a framework for the creation of Tariff Concession Orders (TCOs) which can reduce or eliminate customs duties on certain goods. This mechanism was introduced to address the issue of providing tariff relief for goods that cannot be produced domestically or are not readily available in the Australian market, thereby encouraging imports and potentially lowering costs for consumers and businesses. The Tariff Concession Instrument No. 0808968, made on 8 August 2008, is an example of this legislative intent in action, as it granted a tariff concession for certain aluminium cases applied for by Supercheap Auto Group, resulting in a reduction of the customs duty from 5% to free, effective from 20 May 2008. The policy objective here is to ensure that the Australian market has access to goods that are not produced locally, while also considering the interests of importers who may benefit from the reduced duty rates.
Scope and Application
The Tariff Concession Instrument No. 0808968, made under the Customs Act 1901, applies to certain aluminium cases, granting a tariff concession that was applied for by Supercheap Auto Group. The Act allows for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which reduce the customs duty on specified goods. This particular instrument was enacted on 8 August 2008, and it reduces the duty on the specified aluminium cases from the general rate of 5% to free, effective from the date the application was lodged, 20 May 2008. The instrument does not affect any rights or liabilities of persons other than the Commonwealth and does not impose any liabilities on any person. It is applicable nationally across Australia and operates within the framework set by the Customs Act 1901 and the Customs Tariff Act 1995. The CEO is required to consult by publishing a notice in the Gazette inviting submissions on the TCO application, although in this instance, no submissions were received.
Key Provisions
The Customs Act 1901 (section 269F) establishes a procedure for the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). An applicant can submit an application for a TCO to reduce the customs duty on specific goods, provided these goods are not listed in section 269SJ as ineligible for such concessions. The CEO must then assess if the application meets the core criteria, as outlined in sections 269C, 269B, and 269D of the Act. If the application is deemed suitable, the CEO is required to issue a written order, declaring the goods eligible for a specified tariff reduction (subsection 269P(3)). In this case, the CEO issued TCO No. 0808968 on 8 August 2008, following Supercheap Auto Group’s application on 20 May 2008, which was based on the absence of substitutable goods produced in Australia, as required by section 269C.
The obligations imposed by the Customs Act 1901 on the CEO and applicants include the careful scrutiny of each TCO application to ensure it complies with the core criteria. The CEO must also engage in a transparent process by publishing notices in the Gazette (subsection 269K(1)) to invite submissions from any interested parties. This procedural requirement ensures that all relevant voices are considered before a TCO is issued. Furthermore, the CEO must ensure that the TCO does not adversely affect the rights of non-Commonwealth entities as of the registration date (subsection 269S(1)). Instead, it should favourably impact importers by enabling them to apply for duty refunds on goods imported since the TCO came into effect.
Failure to comply with the obligations or breaching the terms set out in the Customs Act 1901 may result in various civil or criminal consequences. Although specific offences and penalties are not detailed in the explanatory statement, the Act generally provides for penalties under sections such as 269SJ and 269P. These may include fines and other sanctions for non-compliance, particularly if the TCO is misused or if incorrect information is provided in the application. Additionally, any person found to be deliberately evading customs duties by misapplying a TCO could face more severe criminal penalties, reflecting the seriousness of such breaches. The precise penalties would depend on the nature and severity of the infringement, as outlined in relevant sections of the Customs Act 1901.