EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922436
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.
Excel Undercarriage Pty Ltd applied for a TCO in respect of certain drive sprockets on 30 June 2009.
Instrument
TCO No 0922436 was made on 11 September 2009. It declares that those certain drive sprockets 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. 0922436 is taken to have come into force on 30 June 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 Parliament of Australia, establishes a framework for the administration of customs duties, which includes the ability for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to reduce the duty on certain goods. This legislative instrument addresses the need to provide relief from customs duties on specific goods that are not produced domestically, thus encouraging the importation of these goods and potentially benefiting consumers through lower prices. The policy objective is to ensure that no domestic industry is unfairly disadvantaged by the concession, provided that no substitutable goods are produced in Australia. The Customs Act 1901, through the creation of TCOs, aims to balance the interests of domestic producers and consumers by selectively lowering customs duties on imported goods that are not domestically manufactured.
Scope and Application
The Tariff Concession Instrument No. 0922436 applies to entities or individuals who seek a reduction in customs duty on specific goods under the Customs Act 1901. The legislation operates under the framework established by Part XVA of the Customs Act, allowing the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCO) which provide a lower rate of customs duty on specified goods. This applies to entities or individuals who can demonstrate that no substitutable goods are produced in Australia in the ordinary course of business. The geographic scope of this legislation is national, as it applies across Australia and is governed by the Commonwealth. Exclusions are set out in section 269SJ of the Act, which details the types of goods that cannot be subject to a TCO. The application of this Act can be extended or restricted through subordinate instruments, such as regulations, which may specify additional conditions or details on the issuance of TCOs.
Key Provisions
The main operative sections of the Customs Act 1901, specifically part XVA, establish a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer (CEO) of Customs. Section 269F allows a person to apply for a TCO in respect of certain goods, provided they are not listed in section 269SJ, which details goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria set out in section 269C, which includes the absence of substitutable goods produced in Australia on the day the application was lodged, the CEO must make a written order (section 269P(3)).
This legislation imposes certain obligations and requirements on parties applying for a TCO. The applicant must ensure that the goods they seek a concession for are not specified in section 269SJ and that the application meets the core criteria in section 269C. The CEO must then make a determination based on whether the application meets these criteria. Additionally, once a TCO application is accepted as valid, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as per subsection 269K(1). In this instance, Excel Undercarriage Pty Ltd applied for a TCO for certain drive sprockets on 30 June 2009, and after the CEO was satisfied with the application, TCO No. 0922436 was issued on 11 September 2009.
The Customs Act 1901 also includes provisions for offences, penalties, or civil/criminal consequences for breaches of the Act's provisions. However, the explanatory statement does not detail specific offences or penalties related to the making of TCOs. In general, breaches of the Customs Act can result in penalties such as fines or imprisonment, depending on the severity of the breach. For example, under section 234 of the Act, a person who knowingly or recklessly makes a false or misleading statement in relation to an application for a TCO could face criminal penalties.
In this particular case, Excel Undercarriage Pty Ltd successfully applied for a TCO for certain drive sprockets, which are now subject to a rate of duty of free, as opposed to the general rate of 5%. This concession is effective from the date the application was lodged, 30 June 2009. The rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person.