EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1040741
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.
Locksmith Supplies Co applied for a TCO in respect of certain padlock parts on 02 September 2010.
Instrument
TCO No 1040741 was made on 29 November 2010. It declares that those certain padlock parts 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. 1040741 is taken to have come into force on 02 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 Parliament of Australia, provides for the regulation of customs and excise matters, including the imposition of customs duty on imported goods. One of the mechanisms under this Act is the Tariff Concession Order (TCO), which can be applied for by interested parties to reduce the customs duty on certain imported goods. The Customs Act 1901 was amended to include provisions for TCOs in order to address the problem of imposing unfair tariff burdens on imported goods where no suitable Australian-made alternatives exist. This was achieved through Tariff Concession Instrument No. 1040741, which was made on 29 November 2010, and came into force on 2 September 2010, the date the application was lodged. This instrument was designed to address the specific application by Locksmith Supplies Co for tariff concessions on certain padlock parts, reflecting the policy objective of supporting industry competitiveness by reducing the cost of imported goods where no Australian-made substitutes are available.
Scope and Application
The Tariff Concession Instrument No. 1040741, issued under Part XVA of the Customs Act 1901, pertains to the application of Tariff Concession Orders (TCOs) for specific goods. This instrument applies to any person or entity seeking to import goods that meet the criteria outlined in the Act. The geographic scope of the Act is national, with the CEO of Customs determining whether an application for a TCO meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The TCO provides a concession on customs duty, effectively reducing the duty rate to zero for the specified goods, which in this instance are certain padlock parts. The TCO does not apply to goods specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The TCO came into force on the date the application was lodged, 2 September 2010, and does not disadvantage or impose liabilities on any person other than the Commonwealth for actions taken prior to its registration.
Key Provisions
The primary operative sections of the Customs Act 1901 (section 269C, 269F, and 269P(3)) provide the framework for the creation and implementation of Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not those specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, they must make a written order (section 269P(3)) declaring that the goods are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. The CEO's decision must be based on the absence of substitutable goods produced in Australia, as defined in section 269D and 269E.
The obligations imposed on the parties by the Act are primarily on the CEO, who must ensure that the application meets the core criteria before making a TCO. This involves verifying that no substitutable goods were produced in Australia at the time of the application. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made. The CEO is also required to consider any submissions received and respond accordingly.
Breaches of the Act, particularly those involving the misuse or fraudulent application for a TCO, may result in criminal and civil consequences. While the specific offences and penalties are not detailed in the explanatory statement, it is reasonable to infer that any misrepresentation or fraudulent intent in the application process could lead to legal repercussions. The maximum penalties for such breaches would depend on the severity and nature of the offence, as outlined in the broader provisions of the Customs Act 1901 and associated regulations. Additionally, failure to comply with the obligations to publish notices and consider submissions could also result in administrative penalties or legal action.