EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1108393
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.
Australian Aerospace Limited applied for a TCO in respect of certain trolleys on 8 March 2011.
Instrument
TCO No 1108393 was made on 30 May 2011. It declares that those certain trolleys 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. 1108393 is taken to have come into force on 8 March 2011.
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, as supplemented by Tariff Concession Instrument No. 1108393 made in 2011, introduces a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation aims to address the need for reduced customs duty rates on specific goods, thereby encouraging their importation and use within Australia. The policy objective is to facilitate the availability of goods that are not produced domestically, or where domestically produced substitutes exist, by applying a lower customs duty rate as specified in the Tariff. The instrument was introduced following an application by Australian Aerospace Limited for tariff concessions on certain trolleys, which was approved based on the absence of substitutable goods produced in Australia. The instrument ensures that the rights of importers are protected and potentially beneficially affected, while not imposing any liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, as modified by the Tariff Concession Instrument No. 1108393, applies to entities seeking tariff concessions on specific goods imported into Australia. This Act facilitates the application process for Tariff Concession Orders (TCOs) by allowing businesses to apply for a lower rate of customs duty on goods, provided they meet certain criteria. Specifically, the application for a TCO must demonstrate that no substitutable goods are produced in Australia, and it must not pertain to goods specified in section 269SJ of the Act, which excludes certain types of goods from tariff concessions. The application process involves the Chief Executive Officer of Customs who evaluates the application against these criteria before making a decision. The geographic reach of this legislation is national, as it pertains to the importation of goods into Australia and the application is managed at a federal level. The instrument, TCO No. 1108393, which was made on 30 May 2011, specifically applies to certain trolleys and declares that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively imposing a duty rate of free. This legislation does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities except the Commonwealth.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1108393, made under the Customs Act 1901, concern the establishment and application of Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. If the CEO is satisfied that the application does not pertain to goods listed in section 269SJ, which are ineligible for TCOs, the CEO must assess whether the application meets the core criteria outlined in section 269C. This requires the CEO to determine whether, on the day the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business. The definitions provided in sections 269D, 269E, and 269F further clarify what is meant by "goods produced in Australia", "ordinary course of business", and "substitutable goods" respectively. If the CEO confirms that the application meets the core criteria, they are mandated under section 269P(3) to issue a TCO that declares the goods in question are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by this Act on the parties involved, primarily the CEO and the applicant, include ensuring that applications for TCOs are made in good faith and are accompanied by all necessary information. The CEO must rigorously verify that the core criteria are met and that the goods in question do not have substitutable counterparts being produced in Australia. This involves a detailed assessment of the local production capacity and the potential uses of the goods. Furthermore, the CEO has a statutory obligation to publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to lodge submissions opposing the TCO, although in this instance, no such submissions were received. The TCO itself, once made, must be registered, and its effective date is the day the application was lodged (subsection 269S(1)).
In terms of consequences for breaches of the Act, the explanatory statement does not explicitly detail specific offences or penalties for non-compliance. However, it is implicit that failure to adhere to the requirements and obligations outlined in the Act could potentially lead to legal challenges or administrative actions against the CEO or applicants. The benefits of the TCO, such as reduced customs duties for the approved goods, are clear and direct, but any non-compliance with the statutory processes could result in the TCO being overturned or the applicant facing other legal repercussions. The explanatory statement highlights that the TCO does not impose any liabilities on any person and does not affect existing rights adversely, but the broader legal framework of the Customs Act 1901 would apply in cases of non-compliance.