EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1048038
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.
Clark Equipment applied for a TCO in respect of certain air compressors on 27 October 2010.
Instrument
TCO No 1048038 was made on 24 January 2011. It declares that those certain air compressors 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. 1048038 is taken to have come into force on 27 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the imposition of customs duties on imported goods, among other things. It allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) under section 269F, which effectively lower the rate of customs duty on specified goods. The Tariff Concession Instrument No. 1048038 was introduced to address the specific case of Clark Equipment's application for tariff concessions on certain air compressors, ensuring that these goods benefit from a reduced duty rate when no substitutable goods are produced in Australia. The policy objective is to facilitate trade by reducing the cost of importing specific goods, thereby promoting economic efficiency and supporting businesses that rely on importing certain types of equipment. The instrument was registered on 24 January 2011 and is deemed to have come into force on 27 October 2010, the date the application was lodged, without affecting the rights of any person or imposing new liabilities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for Tariff Concession Orders (TCOs) that the Chief Executive Officer of Customs (CEO) can issue to apply a lower rate of customs duty to certain goods. This mechanism is available to any person who can demonstrate that the goods in question are not substitutable by any goods produced in Australia and meet the criteria specified in section 269C of the Act. The application process requires the applicant to lodge a request with the CEO, who must ensure that the goods do not fall under the category specified in section 269SJ that are ineligible for TCOs. Once the CEO determines that the application meets the core criteria, a TCO is issued, reducing the duty rate on the specified goods. For instance, in the case of TCO No. 1048038, certain air compressors were granted a tariff concession, setting their duty rate to free, as no substitutable goods were produced in Australia. This instrument affects the rights of importers favourably by allowing them to apply for a refund of duty on these goods imported since the TCO's effective date. The TCO does not retroactively impose any liabilities or disadvantage any person other than the Commonwealth.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1048038 under the Customs Act 1901 include section 269C, which outlines the criteria that a Tariff Concession Order (TCO) application must meet, and section 269P(3), which mandates the Chief Executive Officer (CEO) of Customs to issue a TCO if the application satisfies the criteria. Section 269F allows a person to apply for a TCO for certain goods, while section 269SJ specifies the types of goods that cannot be subject to a TCO. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions against the TCO application. Finally, section 269S(1) states that the TCO comes into force on the day the application is lodged.
The Act imposes several obligations on the parties involved. The CEO must ensure that the TCO application does not pertain to goods specified in section 269SJ and must evaluate whether the application meets the core criteria as per section 269C. Once the CEO is satisfied that the application meets these criteria, they must issue a TCO under section 269P(3). Additionally, as per section 269K(1), the CEO is required to publish a notice in the Gazette and invite submissions from any interested parties. If no submissions are received, the CEO proceeds to issue the TCO.
There are no explicit offences, penalties, or civil/criminal consequences outlined in the text for breach of the Act's provisions. However, the Act does ensure that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration. This means that the Act primarily focuses on procedural correctness and ensuring that the issuance of a TCO does not unfairly impact existing rights or impose retroactive liabilities.
In summary, Tariff Concession Instrument No. 1048038 under the Customs Act 1901 establishes a clear process for the application and issuance of TCOs, ensuring that they are granted only if the CEO is satisfied that the goods in question do not have substitutable Australian-produced alternatives. The Act imposes obligations on the CEO to evaluate applications, publish notices, and invite submissions. The TCOs issued under this instrument do not impose any new liabilities or disadvantage existing rights, focusing instead on providing tariff concessions for specified goods.