EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0829880
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.
Hpm Industries Pty Ltd applied for a TCO in respect of certain circuit breakers on 05 September 2008.
Instrument
TCO No 0829880 was made on 28 November 2008. It declares that those certain circuit breakers 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. 0829880 is taken to have come into force on 05 September 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. 0829880 was enacted in 2008 under the Customs Act 1901 to address the need for tariff concessions for specific goods that were not produced in Australia in the ordinary course of business. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which lower the customs duty on certain goods. This instrument was introduced to facilitate the application of Hpm Industries Pty Ltd for tariff concessions on certain circuit breakers, following a determination by the CEO that no substitutable goods were being produced in Australia. The objective of the legislation, as outlined in the Act, is to ensure that such tariff concessions are granted in circumstances where it is in the public interest and does not disadvantage any person or impose liabilities on anyone except the Commonwealth. The Tariff Concession Instrument No. 0829880 was published in the Gazette, inviting submissions from interested parties, though none were received. The TCO came into effect on the date the application was lodged and benefits the rights of importers by allowing them to apply for a refund of duty on the affected goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the conditions under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These orders apply to specific goods and provide a lower rate of customs duty for those goods. The application for a TCO can be submitted by any person, and the CEO evaluates the application against the core criteria set out in the Act. If the application meets the criteria, the CEO must make a written order specifying the goods to which the concession applies. The TCO applies to the goods from the date the application was lodged, and it does not disadvantage any person by affecting their rights as they existed prior to the registration of the TCO. The geographic scope of this legislation is national, as it operates under the Commonwealth jurisdiction. The Act does not extend or restrict its application through subordinate instruments, but it does exclude certain goods from being subject to a TCO, as specified in section 269SJ of the Act. The explanatory statement details a specific instance where Hpm Industries Pty Ltd successfully applied for a TCO for certain circuit breakers, resulting in a tariff concession from the general rate of 5% to a free rate.
Key Provisions
The Tariff Concession Instrument No. 0829880, made under the Customs Act 1901, primarily involves the granting of a Tariff Concession Order (TCO) for certain circuit breakers, as requested by Hpm Industries Pty Ltd on 05 September 2008 (section 269F). Once the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria (section 269C), they must issue a TCO declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively making the duty rate free instead of the general 5% rate (subsection 269P(3)). The TCO came into force on the day the application was lodged, 05 September 2008 (subsection 269S(1)).
The Act imposes specific obligations on the CEO regarding the assessment and processing of TCO applications. The CEO must ensure that the application is not in respect of goods that cannot be subject to a TCO, as specified in section 269SJ of the Act. If the CEO is satisfied that the application meets the core criteria, they must make a written TCO (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions on the proposed TCO, although in this case, no submissions were received (subsection 269K(1)).
The Act does not explicitly detail offences, penalties, or consequences for breaches related to TCO applications. However, the general provisions of the Customs Act 1901 would apply for any non-compliance with customs regulations, including potential civil or criminal penalties. For instance, unauthorised importation or exportation of goods, or the provision of false information in a TCO application, could lead to penalties under the Customs Act, such as fines or imprisonment.
The TCO benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not affect the rights of any person other than the Commonwealth or impose liabilities on any person in respect of actions taken before the TCO registration date. This ensures that the TCO operates prospectively without retroactively disadvantaging or imposing liabilities on any parties.