EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411266
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.
Kemppi Welding Machines Australia applied for a TCO in respect of certain parts for welders on 29 October 2004.
Instrument
TCO No 0411266 was made on 7 January 2005. It declares that those certain parts for welders 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 3%.
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 is 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 was lodged. TCO No. 0411266 is taken to have come into force on 29 October 2004.
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 was enacted to provide for the regulation of customs and excise duties in Australia. The Act was introduced to address the need for a structured and systematic approach to customs duties, ensuring efficient administration and compliance. The problem it was introduced to address included the regulation of imports and exports, the collection of customs duties, and the prevention of smuggling and other illicit activities. The Customs Act 1901 was enacted by the Parliament of Australia, aiming to facilitate international trade while protecting domestic industries and ensuring the appropriate collection of revenue.
The Tariff Concession Instrument No. 0411266, issued under the Customs Act 1901, aims to provide tariff concessions on certain goods, thereby reducing the customs duty applicable to these goods. This instrument was introduced to address the specific needs of businesses that import goods that are not produced domestically. By applying for and receiving a Tariff Concession Order (TCO), businesses can benefit from reduced customs duties, making imported goods more competitive in the Australian market. The policy objective of this instrument is to support Australian businesses by lowering the cost of imported goods, which can help in maintaining a competitive edge in the market and potentially lowering consumer prices.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the application of Tariff Concession Orders (TCOs) which provide for reduced rates of customs duty on certain goods. The Act applies to any person or entity seeking to import goods that qualify for a tariff concession, provided that the goods are not those specified in section 269SJ, which are ineligible for TCOs. The Act applies nationally across Australia and is administered by the Chief Executive Officer of Customs (CEO). The CEO is tasked with determining whether an application for a TCO meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia on the date the application was lodged. Once a TCO is made, it applies from the date the application was lodged, and it does not affect the rights of any person other than the Commonwealth in respect of anything done or omitted before the TCO’s registration date. The CEO is also required to publish a notice in the Gazette inviting submissions on the TCO application; however, in the case of TCO No 0411266, no submissions were received.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0411266 (the Instrument) under the Customs Act 1901 (the Act) revolve around the establishment of Tariff Concession Orders (TCOs) to provide lower rates of customs duty for specified goods. Section 269C establishes the core criteria that an application must meet to qualify for a TCO, which is contingent upon the absence of substitutable goods produced in Australia at the time of application. This criterion is further defined in sections 269D and 269E of the Act. If these conditions are satisfied, the Chief Executive Officer of Customs (the CEO) must make a written order (a TCO) specifying the reduced duty rate as per Schedule 4 to the Customs Tariff Act 1995 (the Tariff). In this particular instance, Instrument No. 0411266 declares that certain welder parts are subject to a lower duty rate of 3% instead of the general rate of 5%.
The obligations imposed by the Act on the parties governed by the Instrument include the requirement for applicants to ensure their applications meet the core criteria outlined in section 269C. The CEO is mandated to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). This notice serves as a mechanism for public consultation. In this case, no submissions were received in response to the notice for Instrument No. 0411266. Additionally, the Act ensures that the rights of importers will be beneficially affected, and the TCO does not impose any liabilities on any person other than the Commonwealth.
In terms of enforcement and consequences for non-compliance, the Act does not explicitly outline specific offences or penalties related to the making or breach of a TCO. However, any failure to adhere to the statutory requirements for making a TCO, such as not following the core criteria or not properly consulting with stakeholders, could potentially lead to legal challenges or administrative actions. The Act’s framework is designed to ensure that the tariff concession process is transparent and fair, with the ultimate aim of benefiting importers and maintaining the integrity of the customs duty system. The TCO does not disadvantage any person or impose liabilities for actions taken before the date of registration, thus safeguarding the rights of individuals and entities involved in the import process.