EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0815149
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.
Mtmg Australia applied for a TCO in respect of certain portable lifters on 30 June 2008.
Instrument
TCO No 0815149 was made on 19 September 2008. It declares that those certain portable lifters 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. 0815149 is taken to have come into force on 30 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 was enacted to provide a comprehensive framework for the administration of customs duties and regulations in Australia. This Act addresses the need to regulate the importation and exportation of goods, ensuring that appropriate duties are levied and collected. One aspect of the Act is the Tariff Concession Orders (TCO) scheme, which allows for the reduction or exemption of customs duty on certain goods under specific conditions. The Customs Act 1901 was introduced by the Australian Parliament to establish a structured approach to managing customs duties, ensuring compliance and fairness in trade practices. The policy objective behind the TCO scheme is to support Australian industries by providing tariff relief where domestic production of substitutable goods does not occur, thereby encouraging investment and economic growth in targeted sectors.
Scope and Application
The Customs Act 1901 applies to the administration of customs duties, including the process for granting tariff concession orders (TCOs) as outlined in Part XVA. This part of the Act enables the Chief Executive Officer of Customs to issue TCOs that lower the rate of customs duty on specified goods, provided that the application meets certain core criteria, such as the absence of substitutable goods being produced in Australia at the time of the application. The application of a TCO is limited to goods that are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a tariff concession. The instrument extends to all relevant entities and industries importing or dealing with the specified goods, and its application is nationwide, affecting the rights and duties of importers in accordance with the terms set out in the TCO. The scope of the TCO can be further defined or extended through subordinate instruments, although the primary legislation provides the foundational criteria and process for its implementation.
Key Provisions
The key operative sections of the Customs Act 1901 that are pertinent to the Tariff Concession Order (TCO) include section 269F (which allows for the application for a TCO), section 269C (which outlines the core criteria that must be met for a TCO application to be successful), and section 269P (which stipulates the process for the CEO to make a TCO once the criteria are met). According to section 269F, any individual or entity can apply to the CEO for a TCO concerning specific goods, provided that these goods are not excluded under section 269SJ of the Act. Section 269C mandates that an application is deemed to meet the core criteria if, on the application date, no substitutable goods were produced in Australia in the ordinary course of business. Once the CEO is satisfied that the application meets these criteria, section 269P requires the CEO to issue a written TCO.
The obligations and requirements imposed by the Act on the parties involved are primarily focused on ensuring the proper application and assessment process for a TCO. The CEO has the obligation to determine whether an application meets the core criteria as outlined in section 269C and, if so, to issue a TCO as per section 269P. Section 269K(1) also imposes a requirement on the CEO to publish a notice in the Gazette once an application is accepted as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made. Additionally, section 269S(1) specifies that a TCO comes into force on the date the application is lodged, which in the case of TCO No. 0815149, was 30 June 2008.
Under the Customs Act 1901, there are no explicit offences or penalties outlined for breaches of the TCO provisions. However, the Act does specify potential civil or administrative consequences. If a TCO is found to be incorrectly applied or issued, the affected parties may challenge the TCO in the Federal Court, seeking a judicial review or an injunction to rectify the situation. Moreover, while the TCO does not impose any liabilities on individuals or entities, it does affect the rights of importers beneficially by allowing them to apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations. The Act ensures that the rights of non-Commonwealth persons are not adversely affected by the issuance of a TCO.