EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1002629
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.
Unidrive Pty Ltd applied for a TCO in respect of certain bars on 14 January 2010.
Instrument
TCO No 1002629 was made on 07 April 2010. It declares that those certain bars 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. 1002629 is taken to have come into force on 14 January 2010.
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 mechanism for Tariff Concession Orders (TCOs) as part of its Part XVA, allowing for reduced customs duty rates on specific goods. This legislative amendment was designed to address the gap in providing tariff relief to importers for certain goods that are not produced domestically, thus encouraging trade and supporting domestic industries by preventing local production from being undermined. Enacted by the Australian Parliament, the objective of these concessions is to facilitate smoother trade operations by lowering the customs duty for eligible imported goods, as long as no substitutable goods are produced in Australia. The process involves an application to the Chief Executive Officer of Customs, who assesses whether the goods qualify under the core criteria specified in the Act, and subsequently, if satisfied, issues a TCO that reduces the duty on the specified goods.
Scope and Application
The Tariff Concession Order No. 1002629, made under Part XVA of the Customs Act 1901, applies to specific goods identified in an application submitted by Unidrive Pty Ltd, which the Chief Executive Officer of Customs (CEO) has determined to be eligible for a tariff concession. The eligibility for a concession hinges on the condition that no substitutable goods are produced in Australia in the ordinary course of business at the time the application was lodged. This Act is designed to benefit the importer of these goods by providing a zero rate of customs duty, as opposed to the general rate of 5%, and this concession takes effect from the date the application was lodged. The CEO is required to publish a notice in the Gazette inviting objections, although in this instance, no submissions were received.
Geographically and jurisdictionally, this Act applies on a Commonwealth level, as it is an instrument made under the Customs Act 1901, which is a federal statute. The scope of the Act is limited to the specific goods identified in the application and does not extend to any other goods unless similarly applied for and approved. Additionally, the Act does not disadvantage any person or impose liabilities on any person in respect of actions taken before the date of registration. The Act does not specify any exclusions, exemptions, or thresholds beyond those provided in the Customs Act 1901 and related regulations. Any further specifications or extensions of the Act’s application are likely to be detailed in subordinate instruments or regulations.
Key Provisions
The Customs Act 1901, specifically Part XVA, outlines a framework through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) (s 269F). This process involves an application for a TCO by a person in respect of goods, provided they are not specified in section 269SJ (s 269C). The CEO must then assess whether the application meets the core criteria, which require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C, 269D, 269E). If the CEO is satisfied with the application, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (s 269P(3)).
The obligations under this Act are primarily on the CEO, who must accept and assess TCO applications against the specified criteria. Once an application is accepted as valid, the CEO is required to publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made (s 269K(1)). Unidrive Pty Ltd applied for a TCO on 14 January 2010, and following the CEO's satisfaction that the core criteria were met, TCO No. 1002629 was issued on 7 April 2010. This TCO declares that certain bars are subject to item 50 of Schedule 4 to the Tariff, with a duty rate of free, as opposed to the general rate of 5%.
Breaches of the requirements set forth in the Customs Act 1901 can lead to legal consequences. However, the explanatory statement does not explicitly outline specific offences, penalties, or consequences for non-compliance with the TCO provisions. The Act generally imposes obligations on the CEO to follow the stipulated procedures for assessing and issuing TCOs, and failure to do so might result in legal challenges or administrative penalties. Nonetheless, the explanatory statement does not provide detailed information on the specific penalties or consequences for non-compliance with the TCO provisions.