EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0811281
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.
Boral Limited applied for a TCO in respect of certain bulk cement loading head on 04 June 2008.
Instrument
TCO No 0811281 was made on 02 September 2008. It declares that those certain bulk cement loading head 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. 0811281 is taken to have come into force on 04 June 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 administration of customs duties and other import charges. Specifically, Part XVA of the Act allows for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This instrument was introduced to address the problem of ensuring that Australian businesses have access to essential goods at a reduced customs duty rate where no suitable Australian-made alternatives exist. The policy objective of this legislative provision is to support Australian industries by ensuring they do not face undue competition from imported goods when no domestic substitutes are available. The explanatory statement outlines the process for making a TCO, including the criteria that must be met and the requirement for public consultation. In this instance, Boral Limited applied for a TCO concerning certain bulk cement loading heads, and the CEO granted the concession as no substitutable goods were produced in Australia. The TCO came into effect on the date of the application, with no retroactive effect on the rights of any party other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0811281 under the Customs Act 1901 applies specifically to goods that are the subject of a Tariff Concession Order (TCO). These goods, in this instance certain bulk cement loading heads, benefit from a lower rate of customs duty when the Chief Executive Officer of Customs (CEO) is satisfied that no substitutable goods are produced in Australia in the ordinary course of business. The Act applies to any person or entity that imports these goods, thereby reducing their customs duty burden. The geographic reach of this legislation is national, as it pertains to the Commonwealth of Australia and is enacted under the authority of the Customs Act 1901. The Act excludes certain goods specified in section 269SJ, which cannot be subject to a TCO. Additionally, the instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities for actions taken prior to the TCO's effective date. The TCO is designed to come into force on the date the application is lodged, in this case, 04 June 2008, and it does not affect any existing rights or impose new liabilities.
Key Provisions
The Customs Act 1901 (the Act) contains provisions for the creation of Tariff Concession Orders (TCOs) through Part XVA. Section 269F allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided those goods do not fall under the exclusions listed in section 269SJ. If the CEO determines that the application is valid and meets the core criteria outlined in section 269C, they must issue a TCO. According to section 269C, a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The terms ‘goods produced in Australia’, ‘ordinary course of business’ and ‘substitutable goods’ are defined in sections 269D, 269E and 269F respectively.
The Act imposes certain obligations on the parties involved. The CEO must ensure that the TCO application meets the core criteria, as outlined in section 269C. If the application is valid and meets these criteria, the CEO is required to make a written order under section 269P(3). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties, as required by subsection 269K(1). If no objections are received, the TCO comes into force on the date the application was lodged, as stipulated in subsection 269S(1).
The Act does not explicitly outline specific offences, penalties, or consequences for breaches related to TCOs. However, the Act generally provides for enforcement mechanisms that could be applied in cases of non-compliance with its provisions. For example, if the CEO fails to properly assess an application or improperly issues a TCO, they could be subject to administrative law principles which may include judicial review, penalties for misuse of power, or other corrective measures. While specific penalties are not outlined in the explanatory statement, the general principles of administrative law in Australia would apply to ensure compliance with the Act.