EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1045179
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.
Pacific Hoists applied for a TCO in respect of certain winches on 06 October 2010.
Instrument
TCO No 1045179 was made on 23 December 2010. It declares that those certain winches 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. 1045179 is taken to have come into force on 06 October 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. 1045179, made under the Customs Act 1901, was enacted to address the issue of providing tariff concessions for specific goods that are not produced domestically, thereby encouraging importation and potentially lowering costs for consumers. This instrument was introduced to streamline the process of granting tariff concessions, ensuring that applications are assessed based on criteria such as the availability of substitutable goods produced in Australia. The Customs Act 1901, as amended, facilitates the Chief Executive Officer of Customs to make Tariff Concession Orders, subject to certain conditions. The policy objective behind this legislation is to provide relief on customs duties for goods that are not domestically produced, which can enhance trade and economic activity by making imported goods more competitive.
The instrument was developed following an application by Pacific Hoists for tariff concessions on certain winches, leading to a determination by the CEO that no substitutable goods were produced in Australia at the time of application. This decision was based on the criteria outlined in section 269C of the Act. The instrument, which came into force on the date of the application, aims to benefit importers by allowing them to apply for duty refunds on goods imported since the effective date of the concession, without imposing any new liabilities on any party.
Scope and Application
The Tariff Concession Instrument No. 1045179 under the Customs Act 1901 applies specifically to the goods in respect of which a Tariff Concession Order (TCO) is made, namely certain winches, as submitted by Pacific Hoists on 06 October 2010. This instrument is designed to benefit these particular goods by granting a concession on the rate of customs duty. The Act applies to the Chief Executive Officer of Customs (CEO) who is responsible for deciding whether to grant the TCO based on specific criteria outlined in the Act. The CEO's decision is influenced by the absence of substitutable goods produced in Australia, as defined by sections 269D and 269E of the Act, thereby ensuring that the concession is applicable only when no domestic alternative exists. The geographic reach of this Act is federal, as it is administered under the Commonwealth jurisdiction, and it impacts trade practices involving the importation of these specified goods. The Act does not extend to any goods that are explicitly excluded under section 269SJ of the Customs Act 1901. The TCO does not impose any disadvantages or liabilities on any person, ensuring that the rights of existing parties are protected unless they are the Commonwealth. The instrument was published in the Gazette, inviting any interested parties to provide submissions, although none were received in response to the published notice.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) are sections 269C, 269F, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (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, the CEO must determine whether the application meets the core criteria in section 269C. If the CEO is satisfied that the application meets the core criteria, the CEO must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This decision results in a concession in the rate of customs duty for the specified goods.
The Act imposes several obligations and requirements on the parties involved in the process of applying for and issuing a TCO. The CEO must accept and process valid applications for TCOs. The applicant must ensure that the application does not pertain to goods specified in section 269SJ and that it meets the core criteria in section 269C. The CEO must also publish a notice in the Gazette inviting any interested party to submit any reasons why the TCO should not be made, as required by section 269K(1). Failure to comply with these obligations can lead to the application being rejected.
Under the Act, there are no specific offences, penalties, or civil/criminal consequences directly associated with the process of applying for or issuing a TCO. However, if the CEO does not adhere to the requirements outlined in the Act, such as failing to process a valid application or neglecting to publish the required notice in the Gazette, this could result in legal challenges or administrative consequences. The Act ensures that the rights of any person, other than the Commonwealth, are not adversely affected by the issuance of a TCO, and it does not impose any liabilities on any person due to actions taken before the TCO's registration.