EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1009476
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.
Cavanagh Cranes And Transport applied for a TCO in respect of certain works truck road railers on 23 February 2010.
Instrument
TCO No 1009476 was made on 14 May 2010. It declares that those certain works truck road railers 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. 1009476 is taken to have come into force on 23 February 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 Tariff Concession Instrument No. 1009476, made under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods. Enacted in 2010, this instrument allows for a lower rate of customs duty on goods that are not produced domestically and for which there are no substitutable goods available in Australia. This initiative was designed to facilitate the import of necessary goods by reducing financial barriers, thereby promoting trade and economic efficiency. The Customs Act 1901 empowers the Chief Executive Officer of Customs to make such Tariff Concession Orders (TCOs) if the application meets the core criteria, ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The policy objective of this legislation is to encourage the importation of goods that are not manufactured domestically, thus supporting industries that rely on imported materials and equipment.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) for certain goods, thereby granting them a lower rate of customs duty. This mechanism is applicable to any person or entity seeking to import specified goods into Australia, provided the goods are not listed in section 269SJ of the Act, which excludes certain goods from TCO eligibility. The Act mandates that a TCO application meets core criteria if no substitutable goods are produced in Australia in the ordinary course of business at the time of application. The CEO's decision to grant a TCO is contingent upon satisfying these criteria and follows a process that includes public consultation as per section 269K(1). Once a TCO is made, it applies retroactively to the date the application was lodged, as per section 269S(1), thereby ensuring that the rights of importers are beneficially affected from that date without imposing any new liabilities on them. The scope of this legislation is limited to the Commonwealth jurisdiction and does not affect the rights of any person other than the Commonwealth concerning actions taken before the TCO’s effective date.
Key Provisions
The main operative sections of this legislation, particularly section 269C of the Customs Act 1901, establish the criteria for a Tariff Concession Order (TCO) application to be considered valid. This section stipulates that a TCO application is valid if, on the date the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. The definition of these terms is provided in sections 269D, 269E, and 269F of the Act. Section 269P(3) mandates that if the Chief Executive Officer of Customs (the CEO) is satisfied that the application meets these criteria, they must make a written order (a TCO) specifying the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The Act imposes several obligations and requirements on the parties involved. Firstly, it requires the CEO to decide whether a TCO application meets the core criteria set out in section 269C. The CEO must also ensure that the application is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. If the CEO determines that the application is valid, they must publish a notice in the Gazette inviting any interested parties to lodge submissions. In this case, the CEO did not receive any submissions, indicating that no objections were raised against the TCO application.
The legislation outlines specific consequences for breaches and non-compliance. While the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences for breach, it is clear that any party failing to adhere to the requirements set out in the Act could potentially face legal repercussions. Given that the TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person, the primary consequence of non-compliance would likely be the failure to obtain the intended tariff concession. This could result in the applicant being liable for the full customs duty on the goods, as opposed to the reduced rate specified in the TCO.