EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1049414
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.
RMS (NQ) Pty Ltd applied for a TCO in respect of certain chip spreaders for roadwork on 08 November 2010.
Instrument
TCO No 1049414 was made on 31 January 2011. It declares that those certain chip spreaders for roadwork 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. 1049414 is taken to have come into force on 08 November 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 Parliament of Australia, includes provisions for Tariff Concession Orders (TCOs) which can be made by the Chief Executive Officer of Customs. This legislation was introduced to provide a mechanism for the reduction of customs duties on goods under certain conditions, specifically where no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 1049414 was issued under this authority following an application by RMS (NQ) Pty Ltd for certain chip spreaders used in roadwork. The instrument declares that these goods are subject to a reduced duty rate of free, down from the general rate of 5%, as no substitutable goods are produced in Australia. The Tariff Concession Order came into force on the date the application was lodged, 8 November 2010, and the process involved publishing a notice in the Gazette to invite submissions, which in this case, none were received.
Scope and Application
The Customs Act 1901, specifically under Part XVA, authorises the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCO) that apply a lower rate of customs duty to specified goods, provided certain criteria are met. This legislation applies to any individual or entity that seeks to import goods eligible for tariff concessions. The scope of the Act extends to any goods that are not specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. The Act's jurisdictional reach is national, applying across all states and territories of Australia. Exclusions are provided for goods specified in section 269SJ, and the Act may further delineate ineligible goods through subordinate instruments. The Act's application is triggered when a valid TCO application is lodged, with the concession effective from the date of application lodgement. Notably, the Act ensures that no existing rights or liabilities of non-Commonwealth persons are adversely affected by the TCO.
Key Provisions
The key operative sections of this legislation include sections 269C, 269B, 269D, 269E, and 269P, which detail the criteria and process for applying for and making a Tariff Concession Order (TCO). Section 269C outlines the core criteria for TCO applications, specifically that no substitutable goods were produced in Australia at the time of the application (s 269C). Definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269B, 269D, and 269E respectively (ss 269B, 269D, 269E). If the Chief Executive Officer of Customs (CEO) determines that these criteria are met, they must issue a TCO, as per section 269P(3). TCO No. 1049414, made on 31 January 2011, declares that certain chip spreaders for roadwork are subject to a zero rate of customs duty, down from the general rate of 5%.
The Act imposes obligations on applicants to ensure that their TCO applications meet the specified criteria, particularly the absence of substitutable goods produced in Australia. The CEO has the duty to assess applications against these criteria and, if satisfied, to issue a TCO (s 269C, s 269P(3)). The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (s 269K(1)). In this case, no submissions were received. The TCO's commencement date is the day the application was lodged, 8 November 2010, as per section 269S(1).
Breaching the requirements of the Act or the terms of a TCO may have civil or criminal consequences, although specific offences, penalties, or consequences are not detailed in the text. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and it does not impose any liabilities on any person. Importers will benefit from being able to apply for a refund of duty on goods imported since the TCO's effective date, under paragraph 126(1)(r) of the Regulations.