EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0835610
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.
Hyne And Son Pty Ltd applied for a TCO in respect of certain multi head planer parts on 15 October 2008.
Instrument
TCO No 0835610 was made on 14 January 2009. It declares that those certain multi head planer 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. 0835610 is taken to have come into force on 15 October 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 Australian Parliament, establishes a framework for the regulation of customs and excise duties, including the process for applying tariff concession orders (TCOs). The Tariff Concession Instrument No. 0835610, made under the Act in 2009, aims to address the problem of ensuring that certain goods that are not produced in Australia can benefit from reduced customs duty rates. This legislation provides a mechanism for businesses to apply for tariff concessions, provided that no substitutable goods are produced domestically. The policy objective is to promote trade efficiency by reducing the cost of importing certain goods, thus encouraging their use in Australian markets. This instrument is particularly beneficial for importers who can seek refunds for duties paid on goods imported since the TCO's effective date, without any new liabilities imposed on them.
Scope and Application
The Customs Act 1901, as amended, allows for the creation of Tariff Concession Orders (TCO) under Part XVA, providing lower rates of customs duty on specified goods. These orders are made by the Chief Executive Officer of Customs (CEO) upon application, provided that the goods are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The core criteria for granting a TCO, as outlined in section 269C of the Act, require that no substitutable goods are produced in Australia at the time of the application. This instrument applies nationally, impacting any person or entity involved in the importation of the specified goods. The application process involves public consultation, as stipulated by section 269K(1) of the Act, although no submissions were received for TCO No. 0835610. This particular TCO, effective from the date of application, does not affect the rights of any person except to the benefit of importers who may now claim a refund of duty on goods imported since the effective date, under the Customs (Tariff) Regulations 1997.
Key Provisions
The primary operative sections of this legislation concern the Customs Act 1901, specifically sections 269C, 269B, 269D, 269E, 269P, and 269SJ. These sections establish the framework for Tariff Concession Orders (TCOs) and specify the conditions under which a TCO can be applied for and granted. Section 269C outlines the core criteria that must be met for an application to be successful, requiring that no substitutable goods were produced in Australia at the time of application. This is further clarified in section 269B, which defines key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Section 269P(3) mandates that if the core criteria are satisfied, the Chief Executive Officer of Customs (CEO) must issue a written TCO.
The obligations imposed by the Act on the parties involved are primarily on the applicant and the CEO. The applicant must ensure that their TCO application meets the core criteria, which includes demonstrating that no substitutable goods were produced in Australia at the time of application. The CEO, on the other hand, has the responsibility to assess the application against these criteria and decide whether to grant the TCO. Additionally, the CEO must publish a notice in the Gazette once an application is accepted as valid, inviting any interested parties to submit any reasons why the TCO should not be made.
In terms of potential consequences for breach, the Act does not explicitly state any civil or criminal penalties for non-compliance with the provisions related to TCOs. However, the implications of a breach could include the invalidity of the TCO and potential financial losses for the applicant. The legislation ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, thereby protecting those who have already imported the goods under the old tariff before the TCO came into effect. The Act ensures that no new liabilities are imposed on any person as a result of the TCO, safeguarding against any unforeseen financial burdens.