EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1001655
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.
Boc Ltd applied for a TCO in respect of certain tungsten inert gas tig welders on 11 January 2010.
Instrument
TCO No 1001655 was made on 08 April 2010. It declares that those certain tungsten inert gas tig welders 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. 1001655 is taken to have come into force on 11 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. 1001655, enacted under the Customs Act 1901, aims to address the issue of providing tariff concessions for certain goods, thereby facilitating trade by reducing customs duty rates. This legislation allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods, thereby applying a lower rate of customs duty. Specifically, the instrument pertains to Boc Ltd's application for a TCO for certain tungsten inert gas TIG welders, which resulted in a duty rate reduction from the general 5% to free. Enacted by the relevant legislature, this instrument seeks to provide policy objectives aligned with facilitating smoother trade processes by lowering tariffs on specified goods, thus benefiting importers.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 1001655, pertains to the application and approval of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislative instrument specifically applies to individuals or entities seeking tariff concessions for certain imported goods, in this case, tungsten inert gas TIG welders, where no substitutable goods are produced in Australia. The instrument ensures that the core criteria, such as the absence of substitutable Australian-produced goods, are met before a TCO is granted. The geographic and jurisdictional reach of this legislation is national, as it operates under the overarching authority of the Commonwealth of Australia. The application is not restricted by state or territory boundaries but applies uniformly across Australia. There are no explicit exclusions or exemptions stated in the instrument, though it is inherently limited to goods that meet the specified criteria for tariff concessions. Additionally, the CEO’s decision-making process includes a mandatory publication in the Gazette, inviting public submissions which, in this instance, did not occur. The commencement of the TCO aligns with the date of the application, ensuring that any benefits or changes are retroactively applicable from the date of the initial application.
Key Provisions
The Customs Act 1901 (the Act) includes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (the CEO), as outlined in Part XVA. The main operative sections relevant to TCOs are sections 269F, 269C, 269B, and 269P(3). Under section 269F, any person can apply to the CEO for a TCO for specific goods, provided these goods do not fall under the exclusions listed in section 269SJ. If the CEO is satisfied that the application meets the core criteria, they must decide on the application based on whether any substitutable goods were produced in Australia on the date the application was lodged, as per section 269C. Section 269B defines key terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. If the application meets the core criteria, the CEO must make a written order, as stipulated in section 269P(3), declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff).
Entities governed by the Act, such as Boc Ltd, must ensure that their applications for TCOs are thorough and meet all criteria. The CEO has the obligation to review applications, determine if they meet the core criteria, and make a decision on the application. They must also publish a notice in the Gazette, inviting submissions from any interested parties, as required by section 269K(1). If the CEO is satisfied that the application meets the core criteria and no submissions are received, they must make a TCO, as seen in TCO No 1001655, which was made on 8 April 2010. This order declared that certain tungsten inert gas TIG welders were subject to item 50 of Schedule 4 to the Tariff, with a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. For instance, the CEO must make timely and informed decisions on TCO applications, ensuring they adhere to the statutory criteria. Importers and other applicants must ensure their applications are complete and meet the specified criteria. Additionally, the CEO has the obligation to publish notices in the Gazette to allow for public submissions, ensuring transparency and fairness in the process. The Act also ensures that the TCO does not affect the rights of any person as at the date of registration, thus protecting the interests of importers and other stakeholders.
In terms of penalties and consequences for breach, the Act does not explicitly outline specific offences, penalties, or consequences for non-compliance with TCO provisions. However, general legal principles apply, and any breach of statutory obligations could potentially lead to legal challenges or administrative actions. The CEO’s decisions on TCOs are subject to judicial review, and any party aggrieved by a decision can seek redress in the relevant courts. The primary focus of the Act is on facilitating tariff concessions while ensuring that the process is fair, transparent, and compliant with the statutory requirements.