EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0836803
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.
Jands Pty Ltd applied for a TCO in respect of certain steel bands hoists on 24 October 2008.
Instrument
TCO No 0836803 was made on 16 January 2009. It declares that those certain steel bands hoists 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. 0836803 is taken to have come into force on 24 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 Tariff Concession Instrument No. 0836803 was enacted in 2009 under the Customs Act 1901, which provides a framework for the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This instrument aims to address the issue of applying tariff concessions to specific goods, ensuring that the application of lower customs duty rates is appropriately managed. Jands Pty Ltd applied for a TCO concerning certain steel bands hoists, which was subsequently approved by the CEO, resulting in the tariff concession of 5% being reduced to free. The policy objective underpinning this legislative measure is to facilitate the importation of goods by reducing the customs duty burden, thereby encouraging trade and economic activity without disadvantaging existing rights holders or imposing new liabilities.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the implementation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at applying lower rates of customs duty to specific goods. The application process under section 269F of the Act is open to any person who applies for a TCO in respect of goods, provided that the goods do not fall under the exclusions listed in section 269SJ. The CEO's decision to grant a TCO hinges on the core criteria outlined in section 269C, which requires the absence of substitutable goods produced in Australia in the ordinary course of business. If these criteria are met, the CEO is mandated to issue a written order, a TCO, specifying the applicable tariff item from Schedule 4 of the Customs Tariff Act 1995. This legislative framework ensures that the application of tariff concessions is both targeted and compliant with the overarching customs duties outlined in the Act.
Key Provisions
The Customs Act 1901, under Part XVA, allows the Chief Executive Officer (CEO) of Customs to grant Tariff Concession Orders (TCOs) for certain goods, reducing their customs duty. If a person applies for a TCO (section 269F), the CEO must determine if the goods in question meet the core criteria set out in section 269C of the Act. Specifically, the CEO must ensure that on the date the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business. The definitions of these terms are provided in sections 269D, 269E, and 269SJ of the Act. If the CEO is satisfied that the core criteria are met, they must make a written TCO (section 269P(3)).
The obligations under this Act for the CEO are to review the TCO application, determine whether the core criteria are satisfied, and either approve or reject the application. If approved, the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made (subsection 269K(1)). Additionally, the CEO must ensure that the TCO does not affect any rights or impose any liabilities on persons other than the Commonwealth for actions taken before the TCO registration date (subsection 269S(1)).
In terms of consequences for non-compliance, the Act does not explicitly state any civil or criminal penalties for breaches of the TCO provisions. However, any misuse of the TCO or improper application of tariff concessions could potentially lead to investigations by the Australian Customs and Border Protection Service. Any findings of fraudulent activity could result in legal action under related customs and trade laws, potentially leading to substantial fines and other penalties. It is important for parties to adhere strictly to the provisions and conditions set out in the TCO to avoid any legal repercussions.