EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1001360
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.
B&D Aluminium Pty Ltd applied for a TCO in respect of certain profiles on 07 January 2010.
Instrument
TCO No 1001360 was made on 08 April 2010. It declares that those certain profiles 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. 1001360 is taken to have come into force on 07 January 2010.
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 Tariff Concession Instrument No. 1001360, enacted in 2010, is a legislative instrument under the Customs Act 1901 designed to provide relief from customs duties on specific imported goods. This instrument was introduced to address the problem of ensuring that Australian businesses are not unduly disadvantaged by the availability of cheaper imported alternatives that are not produced locally. The Customs Act 1901 provides a framework for Tariff Concession Orders (TCOs) which reduce or eliminate customs duties on certain goods if they are not produced in Australia or if there are no substitutable goods produced domestically. The policy objective behind this legislation is to support Australian industry by preventing the imposition of customs duties on imported goods that have no local equivalent, thereby fostering fair competition and protecting domestic production where feasible. The instrument was enacted by the Chief Executive Officer of Customs, who is responsible for assessing and approving applications for tariff concessions under the Act.
Scope and Application
The Tariff Concession Instrument No. 1001360, made under the Customs Act 1901, applies to goods that are the subject of a Tariff Concession Order (TCO) issued by the Chief Executive Officer of Customs (the CEO). This instrument specifically concerns certain profiles for which B&D Aluminium Pty Ltd applied for a TCO on 07 January 2010, and which the CEO approved on 08 April 2010. The Act applies to the import of goods that are subject to a TCO, with the geographic reach being national, applying across Australia. The application process involves meeting core criteria, including ensuring no substitutable goods are produced in Australia, as outlined in the Act. The instrument provides that the general rate of customs duty on these goods is reduced to free, benefiting importers who can apply for a refund of duty on goods imported since the date the TCO is taken to have come into force. The CEO is required to publish a notice in the Gazette inviting submissions on the TCO application, although in this instance, no submissions were received. The TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the date of registration, thereby protecting the rights of individuals and entities from any retroactive disadvantage.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 1001360 under the Customs Act 1901 are section 269F, which allows for the application for a Tariff Concession Order (TCO), and section 269C, which outlines the core criteria for the approval of such an order. Section 269F details the process by which an individual or entity can apply to the Chief Executive Officer (CEO) of Customs for a TCO for specific goods. The CEO must then assess the application against the criteria set out in section 269C to determine whether the goods are eligible for the concession. This assessment hinges on whether, on the date the application was lodged, there were no substitutable goods being produced in Australia in the ordinary course of business. If the CEO is satisfied that the core criteria are met, they are required under subsection 269P(3) to issue a written TCO specifying the particular item of the Customs Tariff Schedule 4 to which the goods will apply.
The obligations and requirements imposed by this Act on the parties or entities it governs include the submission of a valid application to the CEO of Customs. The applicant must provide sufficient information to enable the CEO to assess whether the goods are eligible for a TCO. The CEO, in turn, has an obligation to publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be granted, as per subsection 269K(1). The CEO must also ensure that any TCO made is compliant with the core criteria outlined in section 269C and that it accurately reflects the relevant item in Schedule 4 of the Customs Tariff Act 1995. The rights of importers and other stakeholders are safeguarded to the extent that the TCO does not disadvantage anyone or impose liabilities for actions taken prior to the TCO's registration.
There are no explicit offences, penalties, or consequences outlined for breaches of the provisions in this Tariff Concession Instrument. However, the Customs Act 1901, which governs this instrument, does provide for a range of penalties for breaches of customs laws more broadly. These can include fines and imprisonment for serious offences, as well as civil penalties for lesser infringements. For example, under the Customs Act, knowingly or recklessly making a false statement or representation can result in a fine of up to 10,000 penalty units or imprisonment for up to five years, or both. Additionally, failing to comply with a requirement under the Act can result in a fine of up to 1,100 penalty units. The exact penalties depend on the nature and severity of the breach, with the potential for significant financial and criminal consequences for those who do not adhere to the provisions of the Act and its related instruments.