EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0828806
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.
Allied Pumps Pty Ltd applied for a TCO in respect of certain tanks on 29 August 2008.
Instrument
TCO No 0828806 was made on 21 November 2008. It declares that those certain tanks 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. 0828806 is taken to have come into force on 29 August 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 and excise duties in Australia. The introduction of Tariff Concession Orders (TCOs) through Part XVA of the Act addresses the need to provide temporary relief from customs duties on specific imported goods to support domestic industries and promote fair trade practices. This mechanism enables the Chief Executive Officer of Customs to grant tariff concessions to applicants, subject to certain criteria being met, which include the absence of substitutable goods produced in Australia. The instrument in question, Tariff Concession Instrument No. 0828806, was created following an application by Allied Pumps Pty Ltd for tariff concessions on certain tanks, and it was enacted to provide a zero-duty rate on these goods, effective from the date of application submission. This approach facilitates smoother trade operations for importers and aligns with the policy objective of supporting Australian industries by reducing the cost of imported goods.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These orders apply to specific goods for which an applicant has made a request, provided the application does not pertain to goods listed in section 269SJ of the Act, which are ineligible for TCOs. An application meets the core criteria if, on the day it is lodged, no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the CEO determines that an application meets these criteria, they are required to issue a written order, declaring that the specified goods are subject to a prescribed tariff item from Schedule 4 of the Customs Tariff Act 1995, thereby exempting them from the general customs duty rate. The TCO applies to the entities or individuals involved in the importation of the specified goods, and its geographic reach is confined to the Commonwealth of Australia. The Act does not specify exclusions or exemptions beyond those listed in section 269SJ, and the CEO’s authority to issue TCOs can be further regulated or detailed through subordinate instruments, though no such extensions or restrictions are noted in the provided text.
Key Provisions
The Tariff Concession Instrument No. 0828806, as outlined in the explanatory statement, primarily operates under section 269F of the Customs Act 1901. This section allows for the application to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the CEO determines that the application pertains to goods not listed in section 269SJ, which specifies goods ineligible for a TCO, the application must then be evaluated against the core criteria stipulated in section 269C. For a TCO application to meet these criteria, it must be established that, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B defines "goods produced in Australia," "ordinary course of business," and "substitutable goods." If the CEO finds the application meets the criteria, they must issue a written TCO, as outlined in subsection 269P(3), effectively applying a prescribed tariff rate from Schedule 4 of the Customs Tariff Act 1995.
The obligations under this Act primarily rest with applicants who seek a TCO for specific goods. These applicants must ensure their applications are valid and meet the core criteria, particularly demonstrating that no substitutable goods were produced in Australia. The CEO, upon receiving a valid application, has the obligation to process it in accordance with the statutory requirements, including publishing a notice in the Gazette inviting any interested parties to submit objections or comments. The CEO must also ensure that the application does not pertain to goods specified in section 269SJ. In the case of Allied Pumps Pty Ltd, the CEO accepted their application for certain tanks, leading to the issuance of TCO No. 0828806. The CEO's obligation includes verifying the eligibility of the goods for a tariff concession and ensuring the TCO does not disadvantage any person or impose liabilities on them for actions taken prior to the TCO's effective date.
Regarding consequences and penalties, the explanatory statement clarifies that the TCO does not adversely affect the rights of any person other than the Commonwealth. It also does not impose any liabilities on any person for actions taken before the TCO's effective date. The TCO's primary effect is to potentially benefit importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date. There are no specific penalties mentioned for breaching the requirements of the TCO within the provided text, but any failure to comply with the conditions set out in the Act or in the TCO itself could result in legal consequences under the general provisions of the Customs Act 1901 or related legislation.