EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840179
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.
Rosmec Sales & Services Pty Ltd applied for a TCO in respect of certain suction collection sweepers on 18 November 2008.
Instrument
TCO No 0840179 was made on 06 February 2009. It declares that those certain suction collection sweepers 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. 0840179 is taken to have come into force on 18 November 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. 0840179, enacted under the Customs Act 1901, was introduced to address the issue of applying tariff concessions to certain goods that are not produced in Australia and for which there are no substitutable goods available domestically. This instrument facilitates the reduction of customs duty rates for specific imported goods, thereby potentially lowering costs for businesses and consumers. The Customs Act 1901 empowers the Chief Executive Officer of Customs to grant these tariff concessions, provided the application meets the core criteria as stipulated in the Act. This legislative measure aims to ensure that Australian businesses and consumers benefit from competitive pricing for imported goods that cannot be produced locally, thereby enhancing market accessibility and economic efficiency.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity that wishes to apply for a TCO in respect of specific goods, provided that the goods do not fall under the category of those specified in section 269SJ, which cannot be subject to a TCO. The application process requires the applicant to demonstrate that, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. The geographic scope of this Act is national, as it pertains to the administration and regulation of customs duties across Australia. Any TCO made under this Act does not retroactively affect the rights of any person other than the Commonwealth, meaning it does not impose liabilities or disadvantage any party in relation to actions taken prior to the TCO’s effective date. Instead, it benefits importers by allowing them to apply for a refund of duty on goods imported from the date the TCO is deemed to have come into force. The application and implementation of TCOs may be further detailed through subordinate instruments, providing additional guidelines or specifications as necessary.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0840179, under the Customs Act 1901, establish a scheme for the application and approval of Tariff Concession Orders (TCOs) for specific goods, thereby allowing for reduced customs duty rates. Section 269F of the Act outlines the process for applying for a TCO, where a person may apply to the Chief Executive Officer of Customs (CEO) for a lower rate of customs duty on certain goods. If the CEO determines that the application meets the core criteria set out in sections 269C, 269B, 269D, and 269E of the Act, a TCO is issued. The CEO must ensure that no substitutable goods are produced in Australia on the day the application is lodged, as per section 269C. For the purposes of this TCO, item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, granting a free rate of duty on certain suction collection sweepers that were subject to the application by Rosmec Sales & Services Pty Ltd.
The obligations imposed by this Act on the parties involved are primarily centred around the application process for TCOs. The applicant must ensure that their application is complete and meets the criteria set out in the Act. The CEO is required to make a decision on the application based on the information provided and any submissions received, and to publish a notice in the Gazette inviting objections to the TCO. In this case, the CEO did not receive any submissions in response to the invitation to object. The Act also mandates that the TCO comes into force on the day the application is lodged, as per subsection 269S(1).
In terms of consequences for non-compliance, the Act does not specify any civil or criminal penalties for breach of its provisions. However, it does outline the process for objection and review, which could result in the TCO being overturned if the CEO finds that it should not have been made. For instance, if it is found that substitutable goods were indeed produced in Australia, the TCO could be revoked, and the higher rate of duty would apply. The Act also provides for the possibility of a refund of duty paid on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations, thereby ensuring that importers are not disadvantaged by the TCO. The Act does not impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration of the TCO.