EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0842565
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.
Andrew Engineering Pty Ltd applied for a TCO in respect of certain bogie removal system jacks on 04 December 2008.
Instrument
TCO No 0842565 was made on 27 February 2009. It declares that those certain bogie removal system jacks 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. 0842565 is taken to have come into force on 04 December 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 was amended to introduce the scheme for Tariff Concession Orders (TCOs) under Part XVA, aiming to provide tariff relief for certain goods to encourage their importation into Australia. This scheme allows the Chief Executive Officer of Customs to grant concessions on customs duty for goods not produced in Australia, provided they meet specific criteria. Tariff Concession Instrument No. 0842565, enacted in 2009, is an example of this scheme in action, where a TCO was granted for certain bogie removal system jacks, reducing their duty rate from 5% to free. The process requires applications to be assessed against core criteria, including the absence of substitutable goods produced in Australia, and involves public consultation as outlined in the Act. This legislative approach ensures that tariff concessions are granted fairly and transparently, supporting economic interests without imposing undue burdens on Australian producers or consumers.
Scope and Application
The Tariff Concession Instrument No. 0842565, made under the Customs Act 1901, applies to specific goods for which an applicant has requested a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs (CEO). The primary beneficiaries of this legislation are importers of the specified goods, who will receive a concession on the customs duty rate as outlined in the TCO. The legislation is designed to provide tariff relief for goods that do not have Australian substitutes, thereby potentially encouraging the importation of these goods into Australia. The application of this Act is national in scope, operating within the framework of Australian federal law.
The TCO applies to the goods specified in the application, provided the CEO determines that no substitutable goods are produced in Australia in the ordinary course of business. The application process requires the CEO to publish a notice in the Gazette to allow any interested parties to lodge submissions against the concession, although no such submissions were received in this case. The TCO comes into effect on the day the application is lodged and does not retroactively affect any rights or impose any liabilities on persons other than the Commonwealth. The Act allows for the extension or restriction of its application through subordinate instruments, as may be necessary to manage specific cases or categories of goods.
Key Provisions
The primary operative sections of this legislation, specifically sections 269C, 269F, and 269P(3) of the Customs Act 1901, provide the framework for the making of Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application meets the core criteria, which is defined in section 269C, the CEO must then issue a written order declaring the goods subject to a lower rate of customs duty or, in some cases, no duty at all. This declaration is made under section 269P(3) and is based on the absence of substitutable goods produced in Australia on the day the application was lodged.
The obligations imposed on the parties by this legislation are straightforward but crucial. The CEO has a duty to consider each application for a TCO against the core criteria, as outlined in section 269C. If the CEO determines that the application meets these criteria, they are required to make a TCO. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. The CEO’s obligations also include ensuring that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on such persons, as outlined in section 269S(1).
In terms of consequences for breach, the Customs Act 1901 does not explicitly state offences or penalties related to the failure to comply with the TCO process. However, the Act does provide that the rights of importers will be beneficially affected, allowing them to apply for a refund of duty under paragraph 126(1)(r) of the Regulations for goods imported since the TCO is taken to have come into force. The absence of penalties or specific sanctions suggests that the focus is on procedural compliance rather than punitive measures, ensuring that the tariff concession process is followed correctly to avoid any inadvertent disadvantages to third parties.