EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1022968
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.
ASD Holdings Pty Ltd applied for a TCO in respect of certain casing on 21 May 2010.
Instrument
TCO No 1022968 was made on 17 August 2010. It declares that those certain casing 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. 1022968 is taken to have come into force on 21 May 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, facilitates the imposition of customs duty on imported goods and provides mechanisms for tariff concession. The Tariff Concession Instrument No. 1022968, issued in 2010, addresses the gap in providing tariff concessions for certain goods that do not have Australian-made alternatives. This instrument was introduced to support industries by reducing the duty on specific goods, thereby encouraging their import and potentially aiding local businesses that rely on these inputs. The instrument was created under the authority of the Chief Executive Officer of Customs, who must ensure that the concession does not disadvantage any party and aligns with the policy objectives of the Customs Act to regulate imports fairly while supporting economic growth.
Scope and Application
The Tariff Concession Instrument No. 1022968, issued under the Customs Act 1901, applies specifically to individuals or entities that have applied for tariff concessions on certain goods, in this case, ASD Holdings Pty Ltd's application for tariff concessions on certain casing. The instrument facilitates a reduction in customs duty rates for these specified goods, provided they meet the core criteria outlined in the Act. The scope of the Act extends to the federal level, as it is administered by the Chief Executive Officer of Customs, and its application is national, impacting all importers of the specified goods within Australia. The Act does not impose any liabilities on individuals or entities other than the Commonwealth and does not disadvantage existing rights of any person other than the Commonwealth. The instrument allows for the tariff concessions to be applied retroactively to the date of the application, thereby benefiting importers who have already imported the goods since that date. Additionally, the Act allows for the tariff concessions to be further defined or modified through subordinate instruments, ensuring that the application of the tariff concessions can be adapted as necessary to meet changing circumstances or requirements.
Key Provisions
The primary sections of this legislation concern the making of Tariff Concession Orders (TCOs) under the Customs Act 1901, as seen in sections 269C, 269F, and 269P(3). Section 269F enables individuals to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. If the CEO determines that the application is valid and meets the core criteria outlined in section 269C, a TCO must be issued. Section 269P(3) stipulates that the CEO must issue a written order, or TCO, declaring that the specified goods are subject to a particular duty rate outlined in Schedule 4 to the Customs Tariff Act 1995.
Under the Customs Act 1901, the CEO is obligated to ensure that an application for a TCO is valid and does not pertain to goods specified in section 269SJ. If the application is deemed valid, the CEO must evaluate whether it meets the core criteria, particularly whether substitutable goods were being produced in Australia on the day the application was lodged, as per section 269C. Definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the application satisfies these criteria, the CEO is mandated to issue a TCO. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the application. This ensures transparency and allows for any objections to be raised before the TCO is issued.
Failure to comply with the obligations set forth in the Customs Act 1901 could result in civil or criminal consequences. While the explanatory statement does not specify detailed penalties, it is reasonable to infer that non-compliance with the terms of the TCO or the statutory requirements for its issuance could lead to legal action. Such actions might include fines or other penalties imposed by the relevant authorities under the Act. The exact nature and severity of these penalties would depend on the specific breaches and the discretion of the courts.
In this particular case, TCO No. 1022968 was issued on 17 August 2010 for certain casing, declaring them as goods to which item 50 of Schedule 4 to the Tariff applies. The CEO accepted the application from ASD Holdings Pty Ltd on 21 May 2010, and no submissions were received in response to the Gazette notice. The TCO came into effect on the date the application was lodged, 21 May 2010, and it does not disadvantage any person other than the Commonwealth nor impose any liabilities for actions taken prior to the registration date. Importers of these goods will benefit from the tariff concessions and can apply for a refund of duty from the date the TCO took effect.