EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1041213
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.
Boc Ltd applied for a TCO in respect of certain ceramic weld backing on 06 September 2010.
Instrument
TCO No 1041213 was made on 29 November 2010. It declares that those certain ceramic weld backing 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. 1041213 is taken to have come into force on 06 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 Australian Parliament, includes provisions for Tariff Concession Orders (TCOs) under Part XVA, which enable the Chief Executive Officer of Customs to apply reduced customs duties on specific goods. The problem this legislation addresses is the facilitation of access to imported goods that are not produced domestically, ensuring that Australian consumers and businesses can benefit from lower prices and a wider variety of goods. The Tariff Concession Instrument No. 1041213, made under the authority of the Customs Act, was introduced to provide tariff concessions for certain ceramic weld backing, effective from 6 September 2010, the date of the application. The policy objective behind this specific TCO is to eliminate the customs duty on these particular goods, which were not being produced in Australia at the time, thereby benefiting importers who can now claim refunds for duties paid on these goods imported since the commencement date of the TCO. The instrument was made after no objections were raised in response to a notice published in the Gazette inviting submissions from the public.
Scope and Application
The Customs Act 1901, specifically through Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders provide for a lower rate of customs duty on specified goods, which are subject to certain conditions outlined in the Act. The application for a TCO is made by a person to the CEO, who must then determine whether the application meets the core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business. If these conditions are met, the CEO is mandated to issue a TCO, effectively applying a prescribed lower duty rate on the specified goods. The application and processing of these orders are guided by provisions in sections 269C, 269D, 269E, and 269SJ of the Act, which define terms such as "substitutable goods," "produced in Australia," and "ordinary course of business." Notably, the Act does not apply to goods specified in section 269SJ, which lists goods that cannot be subject to a TCO. The geographic and jurisdictional reach of this legislation is national, applying across Australia as per the Commonwealth’s authority under the Customs Act.
Key Provisions
The main operative sections of this legislation are sections 269C, 269B, and 269P of the Customs Act 1901. Section 269C outlines the core criteria for making a Tariff Concession Order (TCO), which requires that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. Section 269B defines key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a written order, i.e., a TCO.
The obligations imposed by the Customs Act 1901 on the parties or entities it governs include the requirement for an applicant to submit a TCO application to the CEO. The CEO must then determine whether the application meets the core criteria as specified in section 269C, and if so, issue a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO. In the case of TCO No. 1041213, Boc Ltd applied for the concession, and the CEO issued the order as no substitutable goods were produced in Australia.
Failure to comply with the requirements of the Customs Act 1901 can result in legal consequences. Although the explanatory statement does not detail specific offences or penalties for breaches of the TCO process, the Act generally provides for both civil and criminal penalties for breaches of customs regulations. Civil penalties may include fines and administrative actions, while criminal penalties could involve imprisonment. The exact penalties would depend on the nature and severity of the breach and would be determined in accordance with the relevant sections of the Customs Act 1901 and associated regulations.