EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0413473
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 tungsten inert gas welders on 10 December 2004.
Instrument
TCO No 0413473 was made on 11 February 2005. It declares that those certain tungsten inert gas 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 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. 0413473 is taken to have come into force on 10 December 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, enacted by the Commonwealth Parliament, facilitates the implementation of Tariff Concession Orders (TCOs) to lower customs duties on certain goods. This legislation was introduced to address the need for tariff concessions to encourage the importation of goods that are not produced domestically, thereby supporting trade and potentially lowering costs for businesses. Pursuant to section 269F of the Customs Act, the Chief Executive Officer of Customs is empowered to make such concessions if specific criteria are met, including the absence of substitutable goods produced in Australia. The instrument TCO No. 0413473, made on 11 February 2005, exemplifies this process by granting a concession for certain tungsten inert gas welders, reducing their duty rate from 5% to 3%. This instrument is designed to ensure that the rights of importers are positively affected, as they may apply for duty refunds for goods imported since the effective date of the concession.
Scope and Application
The Customs Act 1901, specifically through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at providing reduced customs duty rates for certain goods. This legislative framework applies to any person or entity that applies for a TCO on behalf of goods that are not specified as ineligible in section 269SJ of the Act. The process hinges on the CEO's determination that no substitutable goods, as defined under sections 269D and 269E, are produced in Australia. If these criteria are met, the CEO must issue a TCO, which was the case for Kemppi Welding Machines Australia's application for certain tungsten inert gas welders. The geographic reach of this legislation is national, impacting all importers across Australia. The TCO does not affect existing rights or impose new liabilities on anyone other than the Commonwealth, providing relief to importers who may apply for duty refunds on goods imported since the effective date of the TCO.
Key Provisions
The key operative sections of the Customs Act 1901, as relevant to Tariff Concession Instrument No. 0413473, include section 269F, which allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) concerning certain goods (s 269F). If the CEO determines that the application is valid and meets the core criteria outlined in sections 269C and 269B, a TCO may be issued (s 269C, s 269B). Section 269P(3) mandates that a TCO must be made if the CEO is satisfied that the application meets the criteria, and this order specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question (s 269P(3)). The TCO specifies that the goods in question are subject to a reduced rate of duty.
The Act imposes several obligations on parties and entities it governs. Firstly, the CEO is required to ensure that any TCO application does not concern goods specified in section 269SJ of the Act, which are ineligible for TCOs (s 269SJ). Secondly, the CEO must satisfy themselves that the application meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged (s 269C). If the criteria are met, the CEO must make a written TCO (s 269P(3)). Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not proceed (s 269K(1)).
Failure to comply with the requirements of the Customs Act 1901 may result in various consequences. Although the Act does not explicitly detail offences or penalties for non-compliance in the context of TCOs, general provisions within the Customs Act may apply, such as fines and imprisonment for breaches of customs regulations. The severity of penalties would depend on the nature and extent of the breach. Additionally, any failure by the CEO to adhere to the statutory requirements in issuing a TCO might be subject to judicial review, potentially leading to the TCO being declared invalid.