EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516519
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.
Marker Makers applied for a TCO in respect of certain wire mesh on 22 November 2005.
Instrument
TCO No 0516519 was made on 03 March 2006. It declares that those certain wire mesh 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. 0516519 is taken to have come into force on 22 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, enacted by the Australian Parliament, establishes a framework for the administration of customs and excise duties. This Act, particularly Part XVA, provides the mechanism for Tariff Concession Orders (TCOs) which allow for the application of reduced customs duty rates on specified goods. The primary objective of the Act, as articulated in the Explanatory Statement, is to facilitate economic benefits by reducing customs duties on goods for which there are no locally produced alternatives, thereby encouraging the import of these goods and potentially benefiting consumers through lower prices. The Act empowers the Chief Executive Officer of Customs to make decisions on TCO applications, subject to certain criteria and after inviting submissions from the public. The Tariff Concession Instrument No. 0516519, made on 03 March 2006, is an example of this process, where a TCO was granted for certain wire mesh, reducing the duty rate from 5% to free. This legislative mechanism aims to ensure fair trade practices while supporting economic efficiency.
Scope and Application
The Tariff Concession Instrument No. 0516519 under the Customs Act 1901 applies specifically to individuals or entities that have applied for a Tariff Concession Order (TCO) regarding certain wire mesh goods. The Act allows the Chief Executive Officer of Customs (CEO) to grant TCOs that provide a lower rate of customs duty on specified goods, contingent on the absence of substitutable goods produced in Australia. This instrument pertains to the application made by Marker Makers on 22 November 2005, and the TCO, issued on 3 March 2006, reduces the duty on these specific wire mesh products from a general rate of 5% to free duty. The TCO's application is national, affecting all importers within the Commonwealth of Australia. Importantly, the TCO does not disadvantage any person or impose liabilities for actions taken prior to its effective date of 22 November 2005. The instrument may be extended or restricted through subordinate regulations, which are not detailed in the explanatory statement.
Key Provisions
The main operative sections of this legislation (section 269C, 269B, 269E, and 269P(3)) establish the criteria for making a Tariff Concession Order (TCO) and the process for applying for such an order. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods are produced in Australia at the time the application is lodged. Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269E further explains "ordinary course of business," and section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, a written order declaring the goods subject to the TCO must be made.
The obligations imposed by this Act on the parties primarily revolve around the application process for a TCO. An applicant must ensure that no substitutable goods are produced in Australia on the day the application is lodged. The CEO must review the application, determine if it meets the core criteria, and make a written order if satisfied. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as stipulated in section 269K(1). The applicant must respond to any feedback or concerns raised during this process.
There are no explicit offences, penalties, or civil/criminal consequences outlined in the text for breach of this legislation. However, failure to comply with the requirements for making a TCO, such as not ensuring that no substitutable goods are produced in Australia, could result in the CEO not approving the application. This could lead to continued higher customs duties being applied to the goods in question. The text does not specify any penalties or consequences for non-compliance beyond the denial of the TCO application itself.