EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0914303
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.
Trelleborg Engineered Systems Australia applied for a TCO in respect of certain load bearing fixtures on 29 April 2009.
Instrument
TCO No 0914303 was made on 17 July 2009. It declares that those certain load bearing fixtures 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. 0914303 is taken to have come into force on 29 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, enacted by the Parliament of Australia, provides a framework for the imposition of customs duties on imported goods. This legislation was introduced to address the need for a structured system of tariff regulation, ensuring the fair imposition of customs duties while facilitating international trade. The Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce the duty on specific goods under certain conditions. Instrument No. 0914303, made on 17 July 2009, is one such TCO that was introduced to provide tariff concessions on certain load bearing fixtures, reducing the duty from 5% to free. The policy objective here is to support Australian industry by potentially lowering the cost of imported goods, thus aiding competitiveness without imposing new liabilities on importers or affecting existing rights adversely.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the scheme for Tariff Concession Orders (TCOs), which allow for a reduced rate of customs duty on certain goods. The Act applies to any person or entity that may apply to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods in question do not fall under the restricted categories outlined in section 269SJ. This scheme is applicable nationally, as it falls under the Commonwealth's jurisdiction. The TCOs are made under the authority granted by section 269F of the Act, and the CEO's decision is guided by the core criteria stipulated in sections 269C and 269P(3). The CEO must ensure that the goods in question are not substitutable by any produced in Australia and meet the definition of 'ordinary course of business'. Once a TCO is granted, the specified goods are subject to the tariff concessions as outlined in the Customs Tariff Act 1995, which can significantly reduce the duty rates, as evidenced by Tariff Concession Instrument No. 0914303 for certain load-bearing fixtures, where the duty rate dropped from 5% to free. The Act ensures that the rights of importers are protected, and the concession does not impose any retroactive liabilities or disadvantages.
Key Provisions
The primary operative sections of this legislation pertain to the making of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901 (section 269C, 269B, 269D, 269E, 269P, and 269SJ). These sections set out the conditions under which a TCO can be granted, specifying that a TCO application will be accepted if no substitutable goods are produced in Australia on the day the application is lodged (section 269C). The definitions of key terms like 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269SJ respectively. If the CEO is satisfied that the application meets these core criteria, they must make a written order (section 269P(3)).
The obligations imposed by the Act on the parties involved primarily concern the application and approval process for TCOs. The CEO is required to consider each application, determine if it meets the core criteria, and either approve or reject it based on this assessment. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who may have an interest in the outcome of the application (subsection 269K(1)). In the case of TCO No. 0914303, the CEO accepted the application as valid, published the notice, and received no submissions, subsequently approving the TCO.
Regarding offences, penalties, or consequences, the Act does not explicitly outline penalties for non-compliance with the TCO provisions. However, the Act does provide for civil and criminal penalties in other contexts, which could potentially apply if the TCO provisions are breached. The maximum penalties for breaches of customs-related provisions can include fines and imprisonment. Although the specific penalties for breaching TCO provisions are not detailed in the explanatory statement, it is reasonable to infer that similar penalties could apply if an entity were to contravene the requirements set out in the Act.