No Duty, No Problem: How to Use the Tariff Concession System in Australia

When growing a successful business, knowing all available options to save money can be crucial to development and continued success. One program that all savvy importers in Australia should know is the Tariff Concession System (TCOs).

Australian customs estimated that approximately $1.9 billion dollars in revenue was foregone through the use of TCO's in 2014-2015. Thus, importers that are aware of the program and make use of it have the potential to increase their savings.  That being said, the program can be difficult to navigate without proper guidance and expertise.

THE TARIFF AND TCOs

A tariff is defined as a tax or duty to be paid on a particular class of imports or exports. Tariffs are created, first and foremost, to protect the interest of the import country. The tariffs are also used to help protect industries in developed or developing countries and can be leveraged to protect consumers, domestic employment and national security.

Conversely, TCOs allow importers to import a good duty/tax free into Australia where there is no local industry that produces the good. It is designed to allow local industry to become more internationally competitive and is an incentive to importers doing business in Australia. 

To utilize a TCO, there are two options depending on the items that are being imported. The first option is to utilize an already existing TCO upon entry. To utilize an existing TCO, the importer must ensure that the product meets the terms of the concession and falls into the tariff outlined in the order.

The second option is to apply to Australian Customs to create a new TCO for a desired product. This option requires thorough research into the local market to ensure that the product is unique and not domestically manufactured. Once research is complete, the importer must complete the approval form B443 with Australian Customs. After submittal of the approval form, Australian Customs will assess the validity of the application and publish the details in the Commonwealth of Australia Tariff Concessions Gazette, which allows local manufacturers the chance to refute the application. Australian Customs typically makes a decision within two to four months on whether a TCO will be created or not.

Furthermore, there are goods that are ineligible for concessions under the Tariff Concession System; including foodstuffs, clothing, cosmetics and furniture, which have restrictions on importation. 

It is up to each importer to determine the tools that they will utilize to save money in their trade program. TCO's are an excellent choice for importers frequently shipping to Australia. Allyn International’s experience and diverse global trade compliance background provides a strong foundation for client support on the use of TCO's. For more information on TCOs, or to find out about how Allyn International can assist with your Trade Compliance program, contact sales@allynintl.com or visit www.allynintl.com.

Allyn Contributor: Michael Parsons