EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0810248
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.
Super Cheap Auto applied for a TCO in respect of certain screwdriver sets on 27 May 2008.
Instrument
TCO No 0810248 was made on 08 August 2008. It declares that those certain screwdriver sets 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. 0810248 is taken to have come into force on 27 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 Tariff Concession Instrument No. 0810248, enacted in 2008 under the Customs Act 1901, was introduced to address the issue of granting tariff concessions on specific goods, thereby facilitating trade by reducing customs duties. This legislation empowers the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that apply lower rates of customs duty on certain goods, provided that no substitutable goods are produced in Australia and the application meets the core criteria. The policy objective is to ensure that the application of tariff concessions does not adversely affect domestic production and encourages the import of goods that are not locally manufactured.
The instrument was implemented following a valid application by Super Cheap Auto for a tariff concession on certain screwdriver sets, with the Customs Act providing a structured process for application, evaluation, and publication. The TCO came into force on the date of application, 27 May 2008, and does not retroactively affect the rights of any person, ensuring that the rights of importers are beneficially impacted. The instrument was published in the Gazette with an invitation for submissions, though none were received, allowing the TCO to proceed without opposition.
Scope and Application
The Tariff Concession Instrument No. 0810248, made under the Customs Act 1901, applies to specific goods that are the subject of a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. This legislation specifically addresses the application process for TCOs, which allow for lower rates of customs duty on certain imported goods. The Act applies to any person or entity that seeks to import goods eligible for tariff concessions, provided that these goods are not specified in section 269SJ of the Customs Act, which lists goods that cannot be subject to a TCO. The scope of the legislation extends across the Commonwealth of Australia, ensuring uniform application of tariff concessions nationwide. Notably, the Act does not apply to any goods that are already being produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. The Act's application may be further refined or extended through subordinate instruments, which can specify additional conditions or details relevant to the implementation of TCOs.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0810248 under the Customs Act 1901 (section 269F) allow for the application to the Chief Executive Officer of Customs (section 269F) for a Tariff Concession Order (TCO) in respect of goods, provided they are not specified in section 269SJ. The CEO must then decide if the application meets the core criteria under section 269C. If the application is deemed to meet these criteria, the CEO must issue a written TCO as specified in section 269P(3).
The obligations imposed by the Act on the parties include ensuring that the goods for which a TCO is sought do not have substitutable alternatives produced in Australia. Specifically, under section 269C, a TCO application meets the core criteria if, on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. Furthermore, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made. This is a critical step in ensuring transparency and allowing stakeholders to voice any concerns before the TCO is issued.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations could result in penalties. While the specific penalties are not detailed in the explanatory statement, breaches of customs regulations typically result in financial penalties and, in severe cases, criminal charges. The maximum penalties can vary depending on the nature and severity of the breach but may include fines and imprisonment. It is crucial for entities involved in the importation of goods to ensure full compliance to avoid these consequences.