EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515977
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 welding wire on 14 November 2005.
Instrument
TCO No 0515977 was made on 30 January 2006. It declares that those certain 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. 0515977 is taken to have come into force on 14 November 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, as amended, facilitates the granting of Tariff Concession Orders (TCOs) which apply reduced customs duty rates to certain goods. Enacted by the Commonwealth Parliament, this legislation was designed to address the gap in providing tariff relief for goods that are not produced domestically or have no suitable domestic substitutes. The Tariff Concession Instrument No. 0515977, issued under the authority of the Customs Act, is an example of how the scheme operates in practice. This particular instrument was introduced following an application by Cigweld Pty Ltd for tariff concessions on certain welding wires. The Chief Executive Officer of Customs granted the concession, effective from the date the application was lodged, after determining that no substitutable goods were produced in Australia, thus meeting the core criteria for a TCO. The objective of this measure is to provide tariff relief, thereby potentially stimulating trade and encouraging the importation of goods that are not domestically produced.
Scope and Application
The Tariff Concession Instrument No. 0515977 under the Customs Act 1901 applies to any person who has applied for tariff concessions for specific goods, in this case, certain welding wires, and the Chief Executive Officer of Customs who is responsible for deciding whether the application meets the core criteria for a concession. The Act applies to any goods that are the subject of a Tariff Concession Order (TCO) application, provided they are not specified in section 269SJ of the Act as those that cannot be subject to a TCO. The Act also applies to the customs duty rates as prescribed in the Customs Tariff Act 1995, with the TCO reducing the duty on the specified goods from the general rate of 5% to free. Geographically, the application of this Act is within the Commonwealth of Australia and affects the importation and duty rates of the specified goods. There are no exclusions, exemptions, or thresholds explicitly stated in this particular Instrument; however, the Act does provide mechanisms for subordinate instruments to extend or restrict the application of TCOs. The commencement of the TCO is effective from the date the application was lodged, and it does not affect any pre-existing rights or liabilities of any person except the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0515977 made under section 269F of the Customs Act 1901 (section 269F) applies to certain welding wires, declaring that these goods are subject to a lower rate of customs duty as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). This Instrument, TCO No. 0515977, was issued on 30 January 2006 following an application by Cigweld Pty Ltd on 14 November 2005. The Instrument came into effect on the day the application was lodged, 14 November 2005 (subsection 269S(1)). The general duty rate for these goods is 5%, but under this TCO, the rate is free of charge.
The obligations imposed by this legislation require that for a Tariff Concession Order (TCO) to be valid, the Chief Executive Officer of Customs (CEO) must be satisfied that the goods in question are not substitutable by goods produced in Australia and that the application complies with the core criteria as outlined in sections 269C, 269B, and 269D of the Customs Act 1901. Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe there are reasons why the TCO should not be made. In this case, no submissions were received. Furthermore, the rights of importers will be beneficially affected, and they can apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).
Breach of the provisions in the Customs Act 1901 can lead to significant legal consequences. For example, if a party fails to comply with the conditions of the TCO or misrepresents information in an application, they could face civil or criminal penalties. Although the specific penalties are not detailed in the explanatory statement, breaches of customs legislation generally attract penalties that can include substantial fines and, in some cases, imprisonment. The exact penalties would depend on the nature and severity of the breach and would be determined in accordance with the relevant provisions of the Customs Act 1901 and any other applicable laws.