EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1017211
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.
Downer EDI Works Pty Ltd applied for a TCO in respect of certain bitminous membrane sheeting on 13 April 2010.
Instrument
TCO No 1017211 was made on 02 July 2010. It declares that those certain bitminous membrane sheeting 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. 1017211 is taken to have come into force on 13 April 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the administration of customs and excise in Australia. Specifically, Part XVA of the Act facilitates the process by which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These TCOs allow for a lower rate of customs duty on specified goods, provided the application meets certain core criteria. The primary issue addressed by this legislation is the need to provide relief from standard customs duties to importers of certain goods, particularly those that are not domestically produced or are essential imports. The policy objective is to support Australian industries by preventing the imposition of duties on imported goods that have no local equivalent, thus fostering fair competition and encouraging the import of necessary goods. The instrument, Tariff Concession Instrument No. 1017211, was introduced on 2 July 2010, following an application from Downer EDI Works Pty Ltd for certain bituminous membrane sheeting. The CEO determined that no substitutable goods were produced in Australia, satisfying the core criteria, and thus issued the TCO, granting a free rate of duty on these specified goods.
Scope and Application
The Tariff Concession Instrument No. 1017211 under the Customs Act 1901 applies to the concession of customs duty for certain bituminous membrane sheeting, specified in the application by Downer EDI Works Pty Ltd. This instrument allows for a lower rate of customs duty on these specific goods, which are otherwise subject to a general rate of 5%, provided that no substitutable goods are produced in Australia. The instrument operates within the framework established by the Customs Act 1901, particularly sections 269C, 269F, and 269P, which outline the process and criteria for making Tariff Concession Orders (TCOs). The geographic reach of this legislation is national, as it pertains to customs duty across Australia. The instrument became effective on 13 April 2010, the date the application was lodged, and it does not disadvantage any person in respect of actions taken before this date. Importantly, the instrument does not impose any liabilities on any person, and importers of these goods will be able to apply for a refund of duty paid on imports since the effective date of the TCO. The scope of this legislation is further extended through subordinate instruments as necessary to implement and administer the TCO scheme.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1017211, as part of the Customs Act 1901, involve the establishment of Tariff Concession Orders (TCOs) under section 269F (subsections 269C, 269B, and 269P(3)), which allow for reduced customs duty rates on specified goods. Section 269C sets the core criteria for the CEO to consider when deciding whether to grant a TCO, specifically whether no substitutable goods were produced in Australia at the time of the application. This section references further definitions provided in sections 269D (goods produced in Australia) and 269E (ordinary course of business). Section 269P(3) mandates the CEO to issue a written TCO if the criteria are met, specifying the applicable item in Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties involved primarily concern the application process for a TCO. An applicant must ensure that the goods in question do not have substitutable equivalents produced in Australia, as per the definitions and criteria outlined in sections 269C and 269B. The CEO, upon receiving a valid application, has the duty to review the application against these criteria and, if satisfied, to issue the TCO. The CEO must also publish a notice in the Gazette inviting submissions from interested parties regarding the proposed concession, as stipulated in subsection 269K(1). This step ensures transparency and provides an opportunity for public consultation. The TCO, once issued, applies retroactively to the date the application was lodged, as per subsection 269S(1).
The Act outlines specific consequences and penalties for non-compliance with the requirements or breach of the obligations under the TCO scheme. While the explanatory statement does not detail specific penalties, it is implied that failure to adhere to the stipulated criteria for a TCO or misuse of the concessions could result in legal ramifications. Typically, breaches of the Customs Act could lead to civil or criminal penalties, depending on the severity and intent of the violation. The exact penalties would be determined by the applicable sections of the Customs Act and other related legislation, and could include fines or imprisonment.
In summary, the Tariff Concession Instrument No. 1017211 under the Customs Act 1901 provides a framework for granting tariff concessions on specific goods, ensuring that such concessions are granted only when no substitutable goods are produced in Australia. The CEO must follow a defined process to assess applications and issue TCOs, while applicants must ensure their goods meet the specified criteria. The rights of importers are protected, and the TCO does not impose any liabilities on third parties. Non-compliance or misuse of the concessions could lead to legal consequences, although specific penalties are not detailed in the explanatory statement.