EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1042798
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.
Kaebel Leisure applied for a TCO in respect of certain rope wires on 17 September 2010.
Instrument
TCO No 1042798 was made on 13 December 2010. It declares that those certain rope 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. 1042798 is taken to have come into force on 17 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, establishes a framework for the administration of customs duties, which includes the ability to grant tariff concession orders (TCOs) to lower the rate of customs duty on certain goods. The 2011 instrument, Tariff Concession Instrument No. 1042798, was introduced to address the specific problem of ensuring that certain imported goods are subjected to a reduced customs duty rate when there are no substitutable goods produced in Australia. This instrument was made in response to an application by Kaebel Leisure for a TCO in respect of certain rope wires, where the Chief Executive Officer of Customs determined that no such substitutable goods were produced domestically. The policy objective of this instrument is to support Australian importers by reducing the customs duty on specified goods, thereby potentially lowering costs and increasing competitiveness, while ensuring no domestic industry is unfairly disadvantaged.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking to import goods that are eligible for a lower rate of customs duty under a TCO. The scope of the Act extends to all goods that are subject to the Customs Tariff Act 1995, with the application process available to those who can demonstrate that no substitutable goods are produced in Australia. The application must meet core criteria such as the absence of substitutable goods in Australia, as defined under sections 269C, 269D, and 269E of the Act. The geographic reach of the Act is national, applying across Australia, and its provisions are administered by the CEO of Customs. The Act does not specify exclusions or exemptions, but section 269SJ outlines goods that cannot be subject to a TCO. The application of the Act may be extended or clarified through subordinate instruments, which are to be interpreted in conjunction with the primary legislation. The commencement of TCO No. 1042798, for instance, was effective from the date the application was lodged, and it does not disadvantage any person by imposing liabilities for actions taken prior to its registration.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1042798 under the Customs Act 1901 (section 269P(3)) declare that certain rope wires are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, meaning they are exempt from the usual customs duty of 5%. This concession becomes effective from the date the application was lodged, which in this case was 17 September 2010. The instrument, TCO No. 1042798, was made on 13 December 2010, following the Chief Executive Officer of Customs (CEO) determining that no substitutable goods were produced in Australia.
Under the Customs Act, the CEO has a duty to ensure that the application meets core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business. This is outlined in sections 269C and 269SJ, which detail the conditions and exclusions for Tariff Concession Orders (TCOs). The CEO must make a written order if satisfied that the application meets these criteria, and in this instance, the CEO declared that the certain rope wires are goods to which a prescribed item of Schedule 4 to the Tariff applies. The CEO also had to publish a notice in the Gazette inviting any submissions against the TCO, although no submissions were received.
The obligations imposed by the Act on parties or entities governed by it include the requirement for the CEO to evaluate the application against the core criteria and to publish a notice in the Gazette. Additionally, importers of the specified goods are entitled to apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations. There are no liabilities imposed on any person other than the Commonwealth by the TCO.
Should there be any breach of the conditions set out in the Customs Act or the Regulations, the legislation does not explicitly state specific offences, penalties, or consequences. However, non-compliance with customs duties and related regulations can lead to civil or criminal penalties, including fines and imprisonment. The exact penalties would depend on the nature and severity of the breach, as outlined in the broader Customs Act and associated legislation.