EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1023959
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.
Baulderstone Pty Ltd applied for a TCO in respect of certain tension and weight chains on 28 May 2010.
Instrument
TCO No 1023959 was made on 23 August 2010. It declares that those certain tension and weight chains 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. 1023959 is taken to have come into force on 28 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, provides a framework for the administration of customs and excise, including the imposition and collection of duties and taxes on imported goods. The Act was introduced to address the need for a comprehensive regulatory system governing the importation of goods into Australia. Specifically, Part XVA of the Act facilitates the creation of Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duties on certain goods. The purpose of this mechanism is to encourage the importation of goods that are not produced domestically, thereby supporting competition and consumer choice while also potentially lowering costs for businesses and consumers. The Tariff Concession Instrument No. 1023959, made under this Act, demonstrates the application of the TCO framework, where the Chief Executive Officer of Customs determined that a zero duty rate applies to specific tension and weight chains as no substitutable goods were produced in Australia, thereby benefiting importers by potentially reducing their duty liabilities.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) scheme, facilitates the application of lower rates of customs duty on specified goods, subject to certain conditions. The Act applies to any person or entity seeking a reduction in customs duty on goods imported into Australia, provided the goods are not specified in section 269SJ of the Act as ineligible for TCO. The Act operates on a national level, applying across all states and territories of Australia, as it is an Act of the Commonwealth. The CEO of Customs must ensure that the application meets the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged, as outlined in sections 269C and 269S of the Act. The scope of the Act can be extended or modified through subordinate instruments, such as regulations or further legislative amendments, although these are not detailed in the explanatory statement for TCO No. 1023959. This particular order, which was registered on 23 August 2010, applies to certain tension and weight chains, reducing their duty rate from 5% to free under item 50 of Schedule 4 to the Customs Tariff Act 1995. The TCO came into effect on 28 May 2010, the date of application, and does not affect the rights of persons other than the Commonwealth or impose any liabilities on them in respect of actions taken before its registration.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1023959 (F2010L02729) include section 269C, which specifies the core criteria that must be met for a Tariff Concession Order (TCO) application to be accepted. According to section 269C, a TCO application is accepted if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This is further defined by section 269D, which explains what is meant by goods produced in Australia, section 269E, which explains ordinary course of business, and section 269F, which specifies the term substitutable goods. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they must make a TCO, as per section 269P(3), 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 applies.
This legislation imposes certain obligations on the parties involved. The CEO of Customs is required to assess whether an application for a TCO meets the core criteria outlined in section 269C. If the CEO is satisfied that the application meets these criteria, they must make a TCO as stipulated in section 269P(3). Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to submit their views. This ensures transparency and allows for public consultation on the proposed tariff concession.
Failure to comply with the provisions of the Customs Act 1901 or the Tariff Concession Instrument No. 1023959 can result in various consequences. Under section 269SJ of the Act, certain goods are specified as ineligible for TCOs. Applying for a TCO for these ineligible goods would be an offence. The Act does not specify particular penalties for breaches related to TCOs, but general penalties for breaches of the Customs Act can include fines and imprisonment. Additionally, the Act outlines that the TCO does not affect the rights of a person as at the date of registration, so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration.
The Tariff Concession Instrument No. 1023959 specifies that the TCO applies to certain tension and weight chains, reducing the duty from 5% to free. This concession is effective from 28 May 2010, the date the application was lodged. Importers of these goods can apply for a refund of duty paid on goods imported since this effective date, under paragraph 126(1)(r) of the Regulations. The TCO does not impose any new liabilities on any person and does not disadvantage anyone by altering rights as at the date of registration. The implications for compliance are that importers and the CEO must ensure adherence to the terms of the TCO and the Customs Act to avoid any potential legal repercussions.