EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0829885
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.
Ozito Industries Pty Ltd applied for a TCO in respect of certain saw stand on 05 September 2008.
Instrument
TCO No 0829885 was made on 28 November 2008. It declares that those certain saw stand 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. 0829885 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 Customs Act 1901, enacted by the Commonwealth Parliament, provides a framework for the regulation of customs and excise duties, among other things. It includes provisions for the issuance of Tariff Concession Orders (TCOs) that reduce customs duties on specified goods. The Tariff Concession Instrument No. 0829885 was introduced to address the need for tariff concessions on certain saw stands, as applied for by Ozito Industries Pty Ltd on 5 September 2008. The instrument was made by the Chief Executive Officer of Customs on 28 November 2008, declaring that these saw stands are subject to a 0% duty rate, down from the general rate of 5%, as no substitutable goods were produced in Australia. This tariff concession aims to benefit importers by potentially allowing them to claim a refund of duties on these goods from the date the TCO was considered to come into force. The instrument does not disadvantage or impose liabilities on any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0829885 under the Customs Act 1901 applies to the specific goods in respect of which a Tariff Concession Order (TCO) has been granted, in this case, certain saw stands, and the entity that applied for the concession, Ozito Industries Pty Ltd. The Act allows for a TCO to be made by the Chief Executive Officer of Customs (CEO) to provide a lower rate of customs duty on goods not produced in Australia and for which no substitutable goods are produced in Australia. The geographic reach of this legislation is national, applying across Australia as per the Commonwealth's customs laws. The TCO does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person other than the Commonwealth in respect of anything done or omitted to be done before the date of registration. Importantly, the TCO does not affect the rights of persons other than the Commonwealth in a manner that would disadvantage them or impose liabilities. The rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the TCO came into force. The TCO’s application is also extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the prescribed items and rates in the Customs Tariff.
Key Provisions
The Tariff Concession Instrument No. 0829885, under the Customs Act 1901, is pivotal for applying a concessional rate of customs duty on certain goods, specifically the saw stands in this instance. Section 269F of the Act outlines the procedure for an application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO determines that the application pertains to goods that are not excluded by section 269SJ, they must assess whether the application meets the core criteria stipulated in section 269C. The key requirement here is that, on the date the application was submitted, no goods that could substitute those being applied for were produced in Australia in the ordinary course of business, as defined in sections 269D, 269E, and 269F.
The obligations imposed by the Act on the CEO include making a written order declaring that the goods in question are subject to a specific item in Schedule 4 of the Customs Tariff Act 1995 if the core criteria are met. In this case, the CEO concluded that no substitutable goods were produced in Australia, thus satisfying the criteria. As per section 269P(3), the CEO made TCO No. 0829885, effective from 5 September 2008, the date of application. The CEO was also required to publish a notice in the Gazette, inviting any interested parties to submit objections. However, no objections were lodged.
In terms of enforcement and consequences, section 269K(1) of the Act mandates that the CEO must consider any submissions received. The Act does not explicitly state any penalties for non-compliance with the TCO or the process of applying for it. However, general provisions within the Customs Act 1901 apply, which could include fines or other penalties for breaches of customs laws. The TCO itself does not impose any liabilities on persons other than the Commonwealth, ensuring that the rights of existing parties are not adversely affected. Importers of the goods will benefit from this TCO by being able to apply for a refund of duty on goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations.