EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840361
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 gas regulators welding on 19 November 2008.
Instrument
TCO No 0840361 was made on 06 February 2009. It declares that those certain gas regulators welding 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. 0840361 is taken to have come into force on 19 November 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, enacted by the Australian Parliament, established a framework for the application of tariffs on imported goods, including the ability to grant tariff concession orders (TCOs) under Part XVA. This mechanism was introduced to address the need for tariff concessions for specific goods, ensuring that Australian businesses and consumers benefit from lower customs duties under certain conditions. The explanatory statement for Tariff Concession Instrument No. 0840361 outlines the process by which Cigweld Pty Ltd successfully applied for a TCO on certain gas regulators used in welding. The instrument, made on 6 February 2009, recognises that no substitutable goods were produced in Australia at the time of application, thereby meeting the core criteria as outlined in the Act. This concession reduces the general duty rate from 5% to free, effective from the date the application was lodged on 19 November 2008. The policy objective is to provide tariff relief to importers of these specific goods, thereby potentially lowering costs and improving competitiveness for businesses that import these items.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the process through which Tariff Concession Orders (TCOs) can be implemented, allowing for a lower rate of customs duty on certain goods. This legislation applies to any individual or entity that seeks to apply for a TCO for goods not specified in section 269SJ of the Act, which excludes particular goods from being subject to a TCO. The application process involves ensuring that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F. Once the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, a TCO is made, reducing the duty on the specified goods. This Act operates nationally across Australia, with the CEO's decisions being subject to review and potential appeal. The scope of the Act can be extended through subordinate instruments, which may further define terms or create additional regulations regarding TCOs. The Act's jurisdictional reach is comprehensive, applying to all persons and entities involved in the importation of goods affected by a TCO.
Key Provisions
Section 269F of the Customs Act 1901 provides that an individual or entity can apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of specific goods. This process is the starting point for any application seeking a tariff concession. Section 269C further stipulates that for an application to be considered, it must meet the core criteria, which include the absence of substitutable goods produced in Australia on the date the application is lodged. Section 269P(3) mandates that if the CEO determines that an application meets these criteria, a written order declaring the goods to which the tariff concession applies must be issued.
The obligations under this legislation for applicants are clear and straightforward. Firstly, applicants must ensure their application is made in good faith and provides all necessary details to allow the CEO to assess whether the core criteria have been met. They must also be aware that the application is not valid if substitutable goods are produced in Australia on the date of the application. The CEO has a duty to publish a notice in the Gazette inviting submissions from any interested parties, as outlined in section 269K(1) of the Act, although no submissions were received in this case. The CEO's decision to issue or not to issue a TCO must be based solely on the information provided in the application and any submissions received.
Failure to comply with the provisions of the Customs Act 1901 can lead to significant consequences. If an application for a TCO is found to be fraudulent or made in bad faith, the person responsible may face both civil and criminal penalties. Civil penalties can include fines and the requirement to pay back any duties that were improperly avoided. Criminal penalties, which are outlined in the Crimes Act 1914, can result in imprisonment for up to five years. Additionally, section 269S(1) of the Customs Act 1901 stipulates that a TCO is taken to have come into force on the date the application was lodged, ensuring that the rights of parties are protected from the moment the application is submitted.