EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802085
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.
Webforge Australia Pty Ltd applied for a TCO in respect of certain moulded gratings on 6 February 2008.
Instrument
TCO No 0802085 was made on 11 April 2008. It declares that those certain moulded gratings 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. 0802085 is taken to have come into force on 6 February 2008.
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 by Tariff Concession Instrument No. 0802085, introduced a mechanism whereby the Chief Executive Officer of Customs can grant tariff concession orders that reduce the customs duty on specified goods if no substitutable goods are produced in Australia. This mechanism aims to support Australian industries by providing tariff relief on goods that are not locally produced. The instrument was enacted by the Australian Government to fill a legislative gap identified in the Customs Act, ensuring that the CEO has the authority to make such concessions under certain conditions. The policy objective is to promote fair competition and support Australian manufacturing and production by reducing the cost of imported goods that have no local equivalent.
This instrument was introduced to provide clarity and efficiency in the process of applying for tariff concessions, ensuring that the CEO can swiftly respond to applications that meet the specified criteria. The process involves an application from interested parties, a review by the CEO to determine if the goods qualify under the core criteria, and if satisfied, the issuance of a tariff concession order. The Explanatory Statement outlines the specific case of Webforge Australia Pty Ltd, which successfully applied for a tariff concession on certain moulded gratings, resulting in a reduction of customs duty from the general rate of 5% to free. The instrument came into force on the date the application was lodged, ensuring timely relief for importers of the specified goods.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking to reduce the customs duty on specific goods through an application process. The Act's application is national, encompassing the entire Commonwealth of Australia, and it extends to any goods not specified as ineligible under section 269SJ of the Act. The TCO mechanism is designed to benefit importers by potentially reducing the duty rate for goods that are not substitutable by Australian-produced goods, as per the core criteria outlined in section 269C. Notably, the Act does not impose any liabilities or affect the rights of individuals or entities other than the Commonwealth in respect of actions taken prior to the TCO's effective date. The TCO is effective from the date the application is lodged, as per subsection 269S(1), and may be subject to further regulation or clarification through subordinate instruments, ensuring that the scheme operates within the broader legislative context.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0802085 (subsections 269C, 269B, 269D, 269E, 269F, 269P, and 269K) provide the framework for the application and consideration of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided these goods are not specified in section 269SJ. If the CEO determines that the application meets the core criteria outlined in section 269C—that no substitutable goods were produced in Australia in the ordinary course of business—they must issue a written TCO (subsection 269P(3)). This TCO declares that the specified goods are subject to a prescribed rate of duty in Schedule 4 of the Customs Tariff Act 1995. For the specific TCO No. 0802085, this means certain moulded gratings are subject to a duty rate of free, down from the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO has the responsibility to assess whether an application for a TCO meets the core criteria (subsection 269C). This involves verifying that no substitutable goods are being produced in Australia at the time the application is lodged. If the CEO is satisfied with the application, they must make a TCO and publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). In this case, no submissions were received, which may indicate general acceptance of the TCO. Additionally, the CEO must ensure that any TCO made does not disadvantage any person or impose liabilities in respect of actions taken prior to the TCO's registration.
Breaching the provisions of the Customs Act 1901 can lead to various civil and criminal consequences. Although specific offences, penalties, and consequences for breaches are not detailed in the provided text, general penalties under the Customs Act include fines and imprisonment. The severity of these penalties depends on the nature and extent of the breach. The Customs Act also includes provisions for the recovery of duties and penalties, as well as the potential for civil action against those who fail to comply with the Act's requirements. Given the statutory context, it is reasonable to infer that non-compliance could result in significant financial and legal repercussions for the offending parties.