EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1011288
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.
Who Rae Australia applied for a TCO in respect of certain motor vehicle global positioning locks on 04 March 2010.
Instrument
TCO No 1011288 was made on 28 May 2010. It declares that those certain motor vehicle global positioning locks 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. 1011288 is taken to have come into force on 04 March 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 enacted by the Parliament of Australia to provide a comprehensive framework for the administration of customs and excise duties, and the control of goods imported into or exported from Australia. One of the mechanisms provided for in the Act is the ability to issue Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs. This allows for the reduction or elimination of customs duty on certain goods, provided that specific criteria are met. The Act was introduced to address the need for flexibility in customs duty rates to promote trade and industry, ensuring that Australian businesses are not unfairly disadvantaged by high tariff rates. Tariff Concession Instrument No. 1011288 was made under this framework on 28 May 2010, in response to an application by Rae Australia for a concession on motor vehicle global positioning locks. The application was assessed against the core criteria set out in the Act, and as no substitutable goods were being produced in Australia at the time, the CEO was satisfied to issue the concession, resulting in a duty rate of free for these goods. This process ensures that the tariff system can be adjusted to support specific industries and economic objectives while maintaining the overall integrity of the customs duty framework.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to reduce customs duty on certain goods. These concessions apply to goods that are the subject of a TCO application, provided that the CEO determines the application meets the core criteria outlined in the Act. Such criteria include the absence of substitutable goods produced in Australia on the day the application was lodged. Rae Australia's application for a TCO concerning certain motor vehicle global positioning locks was approved, leading to Instrument TCO No. 1011288, which came into force on 4 March 2010. This instrument declares that the specified goods are subject to item 50 of Schedule 4 to the Tariff, resulting in a zero duty rate instead of the general 5%. The CEO's decision-making process includes publishing a notice in the Gazette to invite submissions from interested parties, although no submissions were received for this particular TCO. The Act ensures that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person.
Key Provisions
The Customs Act 1901, as amended, allows for the creation of Tariff Concession Orders (TCOs) under section 269F, enabling a lower rate of customs duty for specified goods. Section 269C stipulates that for a TCO application to meet the core criteria, no substitutable goods can be produced in Australia on the day the application was lodged. Substitutable goods, as defined in section 269D, are those produced in Australia that could be used in place of the goods for which the TCO is sought. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order declaring the goods subject to the TCO, as outlined in section 269P(3).
The Act imposes specific obligations on the CEO regarding the processing of TCO applications. Under section 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting an application as valid, inviting submissions from any person who believes the TCO should not be made. In the case of TCO No. 1011288, Rae Australia applied for tariff concessions on certain motor vehicle global positioning locks on 04 March 2010, and the CEO made the order on 28 May 2010. The TCO took effect from the date the application was lodged, as per subsection 269S(1), and it reduced the duty on these goods from 5% to free.
Under the Customs Act 1901, any breach of the provisions concerning TCOs could result in civil or criminal penalties, although specific penalties are not detailed in the explanatory statement. The Act does not impose any new liabilities on persons other than the Commonwealth and does not affect their rights as at the date of registration. Importers, however, may benefit by applying for a refund of duty on goods imported since the TCO came into effect, under paragraph 126(1)(r) of the Regulations.