EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1009023
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.
Protube Asia applied for a TCO in respect of certain slitter knives on 19 February 2010.
Instrument
TCO No 1009023 was made on 3 May 2010. It declares that those certain slitter knives 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. 1009023 is taken to have come into force on 19 February 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. 1009023, enacted under the Customs Act 1901, addresses the issue of providing tariff concessions on specific goods to promote economic efficiency and competitiveness. The Customs Act 1901, enacted by the Australian Parliament, established a framework for customs duties and tariffs, and the introduction of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) aims to facilitate the importation of goods that are not produced domestically. The CEO is mandated to issue a TCO if certain criteria are met, such as the absence of substitutable goods produced in Australia. In this instance, the Instrument No. 1009023, which became effective on 19 February 2010, grants tariff concessions on certain slitter knives, reducing the customs duty rate from 5% to free. The policy objective is to support importers by potentially reducing their duty costs, thus enhancing their competitiveness in the market.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This Act applies to any individual or entity seeking a concession on the customs duty for specific goods. These goods must be such that no substitutable goods are produced in Australia in the ordinary course of business. The instrument in question, Tariff Concession Instrument No. 1009023, was applied to certain slitter knives, granting them a tariff concession that reduces their duty rate from 5% to free. The geographic and jurisdictional reach of this Act is national, applying across the Commonwealth of Australia. There are specific exclusions mentioned in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. Additionally, the Act can be extended or restricted through subordinate instruments, which allows for further regulation and adjustments as needed. The application process involves a public consultation period where objections can be raised, although in this case, no submissions were received. The TCO takes effect from the date the application is lodged, ensuring that it does not disadvantage any person or impose liabilities for actions taken before its registration.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines a scheme whereby the Chief Executive Officer of Customs (CEO) can issue Tariff Concession Orders (TCOs) that apply a lower rate of customs duty to certain goods. Section 269F allows an individual to apply for a TCO for specified goods, provided they are not listed in section 269SJ, which details goods that cannot be subject to a TCO. To determine whether an application meets the core criteria, section 269C mandates that, on the day the application is lodged, there should be no substitutable goods produced in Australia in the ordinary course of business. Definitions for key terms like "goods produced in Australia," "ordinary course of business," and "substitutable goods" are found in sections 269D, 269E, and 269B respectively.
The obligations imposed by the Act on the parties involved are fairly straightforward. If an application for a TCO is submitted, the CEO must first ascertain whether the goods fall outside the exclusions listed in section 269SJ. Once it is determined that the application pertains to eligible goods, the CEO must evaluate if the core criteria outlined in section 269C are met. If satisfied that these criteria are fulfilled, the CEO is required by subsection 269P(3) to issue a written TCO that specifies the goods and the prescribed tariff item that applies. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette, inviting any interested parties to submit any objections or concerns regarding the TCO application. In the case of TCO No 1009023, the CEO did not receive any submissions.
The Act provides for certain consequences and penalties in the event of non-compliance. If an entity fails to adhere to the stipulations of a TCO, it could potentially face civil or criminal penalties. However, the specific penalties for breaches are not outlined in the provided sections of the Act. The TCO itself ensures that it does not affect the rights of any person, other than the Commonwealth, as at the date of registration. This means that it does not disadvantage any person or impose liabilities for actions taken before the TCO was registered. It also ensures that the rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO is taken to have come into force.