EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912125
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 cutters and or welders parts on 09 April 2009.
Instrument
TCO No 0912125 was made on 03 July 2009. It declares that those certain cutters and or welders parts 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. 0912125 is taken to have come into force on 09 April 2009.
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 was enacted by the Commonwealth Parliament to provide a comprehensive framework for the administration of customs and excise in Australia. This Act facilitates the regulation of the importation and exportation of goods, including the imposition of duties and the application of tariff concessions. One of the key mechanisms introduced under the Customs Act is the ability to issue Tariff Concession Orders (TCOs), which allow for the application of lower rates of customs duty on certain goods, provided specific criteria are met. The policy objective of this legislative framework is to encourage the production of goods within Australia by providing tariff relief where no substitutable goods are produced domestically. This approach aims to support local industries and contribute to the economic development of the country.
The Tariff Concession Instrument No. 0912125, issued on 3 July 2009, exemplifies the application of this framework. Cigweld Pty Ltd applied for a TCO in respect of certain cutters and welders parts, and the order was granted after it was determined that no substitutable goods were produced in Australia. This concession resulted in a reduction of the duty rate from the general rate of 5% to free, effective from 9 April 2009, the date the application was lodged. The instrument was published in the Gazette, inviting any objections, but none were received. Consequently, the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken prior to its registration.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0912125, applies to entities seeking tariff concessions on specific goods imported into Australia. The Act facilitates the application process whereby the Chief Executive Officer of Customs can grant a Tariff Concession Order (TCO) if certain conditions are met, primarily that no substitutable goods are produced in Australia in the ordinary course of business. This instrument is designed to benefit importers by potentially reducing the customs duty on specific goods, in this case, certain cutters and welders' parts, from a general rate of 5% to free. The geographic reach of this legislation is national, as it applies to all imports into Australia, subject to the conditions and criteria set out in the Customs Act. The Act does not specify any exclusions or exemptions apart from those outlined in section 269SJ, which details goods ineligible for tariff concessions. The application of the Act may be further defined or refined through subordinate instruments, which could provide additional details on the types of goods eligible for concessions and the specific processes involved in applying for and granting such concessions.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0912125, as referenced under the Customs Act 1901, involve the establishment of Tariff Concession Orders (TCOs) (section 269F). Section 269C outlines the core criteria that must be met for a TCO application to be successful, specifically requiring that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that these criteria are met, a written order must be issued, declaring the goods in question as eligible for a tariff concession.
The obligations imposed on the parties governed by this Act include the requirement for the CEO to consider applications for TCOs and to make decisions based on the specified core criteria. The CEO must also ensure transparency by publishing notices in the Gazette inviting submissions from interested parties, although in this instance, no submissions were received (subsection 269K(1)). The Act further stipulates that the TCO does not adversely affect the rights of persons other than the Commonwealth and does not impose any liabilities on them in relation to actions taken before the TCO’s registration date (subsection 269S(1)).
Regarding consequences, the Customs Act 1901 does not specify explicit offences or penalties for breaches of the TCO provisions within this explanatory statement. However, the Act does imply that any misuse or improper application of tariff concessions could potentially lead to legal scrutiny or administrative penalties, though the exact nature of these consequences is not detailed. Importers, on the other hand, are afforded the opportunity to apply for refunds of duty on goods imported since the date the TCO is deemed to have come into force (paragraph 126(1)(r) of the Regulations). This provision ensures that the rights of importers are protected and they are not disadvantaged by the application of the TCO.