EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1037050
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.
Hamon Australia applied for a TCO in respect of certain wires on 12 August 2010.
Instrument
TCO No 1037050 was made on 08 November 2010. It declares that those certain wires 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. 1037050 is taken to have come into force on 12 August 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 Parliament of Australia, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders allow for a reduced rate of customs duty on specified goods, provided they meet certain criteria. The Act was designed to address the need for flexibility in tariff rates to support Australian businesses and industries by potentially lowering import costs. Instrument No. 1037050, enacted on 8 November 2010, is an example of a TCO applied to certain wires, allowing them to be imported duty-free under specific conditions. This legislative mechanism ensures that such tariff concessions are both transparent and subject to potential public consultation, while also protecting the rights of importers and other stakeholders.
Scope and Application
The Tariff Concession Instrument No. 1037050, made under the Customs Act 1901, pertains specifically to the application of tariff concessions for certain wires imported into Australia. The legislation applies to individuals or entities seeking tariff concessions for these specific goods, ensuring that they benefit from a reduced customs duty rate as outlined in the Customs Tariff Act 1995. The application of this Act is limited to the particular goods specified in the TCO, namely certain wires, and does not extend to any other goods or industries unless similarly specified through further applications and approvals. The Act operates under the jurisdiction of the Commonwealth, with the Chief Executive Officer of Customs being responsible for the decision-making process on tariff concession applications. There are statutory exclusions for goods that cannot be subject to a tariff concession, as outlined in section 269SJ of the Customs Act 1901. The Act may be extended or further defined through subordinate instruments, such as regulations, which can provide additional clarity or conditions for the application of tariff concessions.
Key Provisions
The main operative sections of Tariff Concession Order No 1037050, which is a part of the Customs Act 1901, revolve around the establishment and effects of Tariff Concession Orders (TCOs) (s 269C, s 269F, s 269P(3)). Section 269F allows for the application to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the application meets the core criteria, as defined in section 269C, the CEO must make a written order (a TCO) declaring that the goods in question are subject to a specific tariff concession (s 269P(3)). This means that instead of the general rate of duty, which might otherwise apply to such goods, a lower or free rate of duty is applied.
The obligations imposed by the Act on the parties governed by it primarily concern the application process and the criteria for approval of TCOs. An applicant must ensure that their application meets the core criteria, particularly that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged (s 269C). The CEO, upon receiving a valid application, must publish a notice in the Gazette and invite submissions from any interested parties. If no submissions are received, the CEO is required to proceed with making the TCO if the application meets the criteria (s 269K(1)).
Regarding consequences for breach, the Customs Act 1901 does not explicitly state civil or criminal penalties for failing to comply with the requirements of a TCO. However, general compliance with customs regulations is critical, and non-compliance can lead to legal repercussions under other sections of the Act, potentially including fines and penalties for incorrect declarations or fraudulent activities. The focus of TCOs is primarily on tariff concessions and does not explicitly introduce new penalties beyond those already established in the broader customs framework.