EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0831994
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.
Tyrout Australia applied for a TCO in respect of certain wall saws on 19 September 2008.
Instrument
TCO No 0831994 was made on 05 December 2008. It declares that those certain wall saws 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. 0831994 is taken to have come into force on 19 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. 0831994 was enacted under the Customs Act 1901 to address the need for tariff concessions on certain imported goods. The Act, as amended, provides a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that lower the rate of customs duty on specific goods, provided that no substitutable goods are produced in Australia. The instrument was introduced by the Parliament of Australia to streamline the process of tariff concessions and ensure that imported goods can benefit from reduced duties when they meet the specified criteria. The policy objective is to encourage the importation of goods that are not locally produced, thereby supporting economic efficiency and consumer choice.
The explanatory statement for Instrument No. 0831994 indicates that it was made on 5 December 2008, following an application by Tyrout Australia for a TCO on certain wall saws. The CEO determined that no substitutable goods were produced in Australia, thus satisfying the core criteria under section 269C of the Act. As a result, the CEO issued a TCO that effectively grants a free rate of duty on these wall saws, reducing the general rate from 5% to 0%. The TCO came into effect on the date the application was lodged, 19 September 2008, and importers of these goods may apply for a refund of duties paid since that date. The instrument ensures that the rights of existing parties are not adversely affected and does not impose any new liabilities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) that provide for a lower rate of customs duty on certain goods. This legislation applies to any person or entity that wishes to apply for a TCO in respect of goods that are not specified in section 269SJ of the Act, which includes goods that cannot be subject to a TCO. The application process requires the CEO to determine if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as per sections 269C and 269F. If the application meets these criteria, a TCO is issued, which then applies a reduced or free duty rate on the specified goods. The CEO must also publish a notice in the Gazette to invite any interested parties to lodge submissions, although no submissions were received for this particular TCO. The TCO has a retroactive effect from the date the application was lodged, meaning that importers can apply for a refund of duty on goods imported since that date. This legislation has a national reach, applying across Australia, and does not disadvantage any person by imposing liabilities for actions taken before the TCO was registered.
Key Provisions
The key operative sections of the Customs Act 1901, particularly in relation to Tariff Concession Orders (TCOs), are outlined in sections 269C, 269F, 269P, and 269S. Section 269F allows for the application for a TCO by any person, which must then be evaluated by the Chief Executive Officer (CEO) of Customs. If the application meets the core criteria, as defined in section 269C, the CEO is required to issue a written TCO (section 269P). This order specifies the goods to which a prescribed tariff item applies, effectively reducing or eliminating customs duty on those goods (section 269P(3)). The TCO takes effect from the date the application was lodged (section 269S).
The Act imposes several obligations on the parties involved in the TCO process. The CEO must ensure that the application meets the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business. This is defined in section 269D for 'goods produced in Australia', section 269E for 'ordinary course of business', and section 269F for'substitutable goods'. The CEO must also publish a notice in the Gazette inviting submissions on the application, as mandated by section 269K. Failure to adhere to these requirements could result in the TCO not being issued or being challenged in a legal context.
Breaches of the provisions outlined in the Customs Act 1901 can lead to various consequences. If a person fails to comply with the terms of a TCO or if there is any fraudulent activity related to the application process, this could result in civil or criminal penalties. The Act does not specify maximum penalties for breaches, but it is within the purview of the relevant authorities to impose fines or other sanctions. Additionally, any person adversely affected by a TCO may seek legal redress, and the courts may impose penalties or other remedies as appropriate.