EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0819450
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.
Sun Metal Corporation applied for a TCO in respect of certain agitators parts on 17 July 2008.
Instrument
TCO No 0819450 was made on 10 October 2008. It declares that those certain agitators parts 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. 0819450 is taken to have come into force on 17 July 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 of goods into Australia. The Act provides for the imposition of duties and other charges on imported goods, as well as the administration of the customs and excise systems. The Tariff Concession Instrument No. 0819450, enacted in 2008, addresses the problem of ensuring that Australian industries can access necessary goods at competitive prices by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that provide for lower rates of customs duty on certain goods. This instrument was introduced to provide a tariff concession for Sun Metal Corporation’s application for certain agitators parts, effective from the date of the application, 17 July 2008. The policy objective is to facilitate the import of goods that are not produced in Australia, thereby supporting industry competitiveness and economic efficiency.
Scope and Application
The Customs Act 1901, under which the Tariff Concession Instrument No. 0819450 was enacted, applies to any entity or person seeking tariff concessions for specified goods that are imported into Australia. The Act allows for the Chief Executive Officer of Customs to grant tariff concession orders for goods, provided the application meets the criteria set out in the Act. Specifically, the application must not relate to goods excluded under section 269SJ, and it must be established that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. The instrument, TCO No. 0819450, applies to certain agitators parts, reducing their duty from the general rate of 5% to free. The instrument's reach is national, operating under the Commonwealth's authority. Importantly, the TCO does not retroactively affect the rights of any person other than the Commonwealth and does not impose any new liabilities, although it does allow for the refund of duties paid on the specified goods since the instrument's effective date.
Key Provisions
The Customs Act 1901 provides for the creation of Tariff Concession Orders (TCOs), which allow for a reduced rate of customs duty on certain goods. Section 269F of the Act outlines the process for applying for a TCO, while section 269C specifies the core criteria that must be met for the application to be successful. Specifically, a TCO application meets the core criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they must make a written order declaring that the goods in question are subject to a lower rate of duty as specified in Schedule 4 of the Customs Tariff Act 1995. This process was followed in the case of TCO No. 0819450, which was made in respect of certain agitator parts on 10 October 2008, after Sun Metal Corporation applied for a TCO on 17 July 2008.
The Act imposes certain obligations on the CEO in relation to TCOs. Under subsection 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions if they believe there are reasons why the TCO should not be made. In the case of TCO No. 0819450, the CEO did not receive any submissions in response to this invitation. Additionally, subsection 269S(1) provides that a TCO is taken to have come into force on the day on which the application for the TCO was lodged, meaning that TCO No. 0819450 is deemed to have come into effect on 17 July 2008.
There are no explicit offences, penalties, or consequences outlined in the Act for breach of the TCO provisions. However, it is worth noting that the TCO does not affect the rights of any person (other than the Commonwealth) in a way that would disadvantage them or impose liabilities for actions taken before the TCO was registered. Instead, the rights of importers will be beneficially affected, as they 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, under paragraph 126(1)(r) of the Regulations. Furthermore, the TCO does not impose any liabilities on any person. It is important for parties subject to the TCO to ensure that they comply with its terms and conditions, as failure to do so may result in legal consequences.