EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511456
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.
Cigweld Pty Ltd applied for a TCO in respect of certain flux cored welding wire on 31 August 2005.
Instrument
TCO No 0511456 was made on 11 November 2005. It declares that those certain flux cored welding wires 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. 0511456 is taken to have come into force on 31 August 2005.
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, introduces a scheme for Tariff Concession Orders (TCOs) to provide lower rates of customs duty for certain goods. This legislation was introduced to address the issue of ensuring that Australian businesses can compete fairly in the global market by reducing the cost of imported goods that have no Australian-made alternatives. The Tariff Concession Instrument No. 0511456, issued under this Act, specifically provides a tariff concession for certain flux cored welding wires, which are essential for various industrial applications. The policy objective is to support industries by making critical inputs more affordable, thereby encouraging local manufacturing and economic growth. The Chief Executive Officer of Customs is responsible for determining whether an application for a TCO meets the core criteria, ensuring that the concession only applies to goods that are not produced in Australia. This mechanism helps balance the needs of Australian industries with the broader economic interest of maintaining competitive import prices.
Scope and Application
The Customs Act 1901, as amended, encompasses provisions for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) under section 269F, which provide for a lower rate of customs duty on specified goods. These orders apply to any entity or person who imports the specified goods, provided they comply with the conditions stipulated in the TCO. The geographic scope of this Act is national, as it operates within the Commonwealth of Australia. The Act excludes goods listed in section 269SJ, which cannot be subject to a TCO, and requires that no substitutable goods were produced in Australia on the day the application was lodged. The scope of the Act is further extended through subordinate instruments such as the Customs Tariff Act 1995, which defines the applicable rates and items. The commencement of a TCO, such as Tariff Concession Instrument No. 0511456, is effective from the date the application was lodged, as outlined in subsection 269S(1) of the Act, with no retroactive effect on existing rights or liabilities.
Key Provisions
The key sections of the Tariff Concession Instrument No. 0511456, made under the Customs Act 1901, provide for the granting of a Tariff Concession Order (TCO) which allows for a reduced or free customs duty on certain goods. Under section 269F, an applicant can request a TCO from the Chief Executive Officer (CEO) of Customs, provided the goods in question are not specified in section 269SJ, which lists goods that are ineligible for TCOs. If the CEO is satisfied that the application meets the core criteria outlined in sections 269C, 269B, and 269D, a TCO will be issued (section 269P(3)). In this instance, the CEO determined that the application from Cigweld Pty Ltd for certain flux cored welding wire met the necessary criteria, resulting in the issuance of TCO No. 0511456, which specifies that the goods are subject to a free rate of duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995.
Entities and individuals governed by this legislation must adhere to specific obligations and requirements. For applicants seeking a TCO, they must ensure their application is valid and does not pertain to goods listed in section 269SJ of the Act. The CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested party to submit objections (subsection 269K(1)). In the case of TCO No. 0511456, no objections were lodged. Additionally, the CEO must verify that no substitutable goods are produced in Australia in the ordinary course of business before issuing a TCO, as stipulated by sections 269C and 269E.
Failure to comply with the provisions of the Customs Act 1901 and the accompanying regulations could result in various penalties and consequences. While the explanatory statement does not detail specific offences or penalties related to breaches of TCO provisions, general provisions within the Customs Act outline potential penalties for non-compliance with customs regulations. Typically, these can include fines and, in severe cases, imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as any relevant statutory provisions. For TCO-specific matters, the implications would generally revolve around the misuse of tariff concessions or the importation of goods not qualifying for the concessions, which could lead to financial penalties or the imposition of full customs duties on the goods in question.