EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1040455
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.
Blucher Australia applied for a TCO in respect of certain press tools on 01 September 2010.
Instrument
TCO No 1040455 was made on 15 November 2010. It declares that those certain press tools 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. 1040455 is taken to have come into force on 01 September 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 Commonwealth Parliament, provides a framework for the imposition of customs duties on imported goods. To address the economic impact on certain industries and to support the manufacturing sector, the Act allows for the creation of Tariff Concession Orders (TCOs), which provide reduced customs duties on specified goods. This mechanism ensures that Australian industries are not unduly burdened by import tariffs, thereby supporting local production and competitiveness. Tariff Concession Instrument No. 1040455, made under the authority of the Customs Act, addresses the specific issue of imposing a zero rate of duty on certain press tools applied for by Blucher Australia, recognising that no substitutable goods were produced in Australia. The instrument was introduced following a valid application and after a period of public consultation yielded no objections, ensuring that the measure aligns with the policy objective of fostering economic growth through tariff relief.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders can reduce the rate of customs duty on certain goods, provided that the application meets the core criteria specified in the Act. Applications for TCOs can be submitted by any person, and if the CEO determines that the goods do not fall under the restricted categories outlined in section 269SJ, and that no substitutable goods are produced in Australia, a TCO can be issued. This legislation applies to goods that are not produced domestically in the ordinary course of business and for which there are no suitable domestic substitutes. The geographic reach of this Act is national, as it applies across Australia, governed by the Commonwealth. There are no exclusions mentioned in the explanatory statement, and the application process is subject to the CEO's assessment based on the criteria and the absence of public submissions opposing the concession. The TCO does not retroactively affect any existing rights or liabilities, ensuring that it only benefits future transactions and does not disadvantage any person by imposing new liabilities on past actions.
Key Provisions
The Customs Act 1901 (the Act) enables the Chief Executive Officer of Customs (the CEO) to create Tariff Concession Orders (TCOs) under Part XVA, which allows for a reduced customs duty rate on specified goods (section 269F). An application for a TCO can be made if the goods are not listed in section 269SJ, which includes goods that are restricted from tariff concessions (section 269SJ). To meet the core criteria for a TCO, the CEO must be satisfied that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). "Substitutable goods" are defined in section 269D as goods produced in Australia that can be used in the same way as the goods subject to the TCO application, including design uses.
Entities or individuals seeking a tariff concession must submit an application to the CEO, who then assesses it against the core criteria, including the absence of substitutable goods produced in Australia (section 269C). If the application meets the criteria, the CEO must make a TCO, specifying the relevant tariff item that applies to the goods (subsection 269P(3)). Once a TCO is made, the specified goods are subject to the reduced duty rate, and in the case of imported goods, importers can apply for a refund of duties paid since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).
Breaching the conditions of a TCO or providing false information in an application can lead to legal consequences. While the explanatory statement does not explicitly list offences, penalties, or civil/criminal consequences for breaches, the Act generally provides for penalties under the administrative framework it operates within. This might include fines, imprisonment, or both, depending on the severity of the breach. The exact penalties would be determined based on the specific breach and the relevant provisions of the Customs Act 1901 or other applicable legislation. The TCO itself does not impose liabilities on any person for actions taken before its effective date.