EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0905677
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.
Schwing Australia applied for a TCO in respect of certain hydraulic power packs on 19 February 2009.
Instrument
TCO No 0905677 was made on 15 May 2009. It declares that those certain hydraulic power packs 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. 0905677 is taken to have come into force on 19 February 2009.
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, includes provisions that allow the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to reduce customs duty on certain goods. This legislative framework was introduced to address the gap in tariff concessions for goods that are not produced domestically and are not specified in the list of goods ineligible for TCOs. The policy objective, as outlined in the explanatory statement, is to facilitate trade by lowering the duty on imported goods that do not have local substitutes, thereby encouraging importation and potentially stimulating economic activity. The Tariff Concession Instrument No. 0905677, issued on 15 May 2009, exemplifies this process by applying to specific hydraulic power packs, resulting in a duty-free status for these goods as of their application date, 19 February 2009. This instrument ensures that no person, other than the Commonwealth, is disadvantaged or subjected to new liabilities under this concession.
Scope and Application
The Customs Act 1901, through its Part XVA, provides a framework for the application of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This Act applies to individuals or entities seeking tariff concessions for specific goods, ensuring that these goods are not substitutable by any produced in Australia and are not excluded by section 269SJ. The scope of the Act is national, impacting the entire Commonwealth, and it extends to any goods that meet the criteria for concession, regardless of the industry or type of transaction. Notably, this Act does not affect any pre-existing rights of persons, other than the Commonwealth, and does not impose any new liabilities, although it does afford benefits such as duty refunds to importers. The application of the Act is further refined through subordinate instruments, which may specify additional conditions or details necessary for the implementation of tariff concessions.
Key Provisions
The Customs Act 1901 (the Act) under which the Tariff Concession Instrument No. 0905677 was made, allows for the reduction of customs duty on certain goods through the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (the CEO) (section 269F). A TCO application must meet the core criteria, which include that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged (section 269C). For the purposes of these criteria, 'substitutable goods' are defined as those produced in Australia that can be used in a way that corresponds with the goods for which the TCO is sought (section 269B and 269D). If the CEO determines that an application meets these criteria, they must issue a TCO (section 269P(3)). In this case, the CEO issued TCO No. 0905677 on 15 May 2009, declaring that certain hydraulic power packs are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a duty rate of free instead of the general rate of 5% (section 269S(1)).
The Act imposes several obligations on the CEO regarding the processing of TCO applications. Upon receiving an application, the CEO must decide whether it meets the core criteria (section 269C). If satisfied, the CEO must issue a TCO (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). In the case of TCO No. 0905677, no submissions were received. The CEO also has the responsibility to ensure that the rights of importers are beneficially affected by the TCO, allowing them to apply for a refund of duty on goods imported since the date the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
The Act does not specify any offences, penalties, or civil/criminal consequences for the failure to comply with the requirements of issuing a TCO. However, the TCO itself does not impose any liabilities on any person, including the Commonwealth, in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)). The rights of importers are protected, ensuring they are not disadvantaged or subjected to liabilities arising from actions taken prior to the registration of the TCO.