EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1046700
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.
Welding Industries of Australia applied for a TCO in respect of certain wire feeders on 03 January 2011.
Instrument
TCO No 1046700 was made on 10 January 2011. It declares that those certain wire feeders 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. 1046700 is taken to have come into force on 03 January 2011.
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 was enacted to provide a structured framework for the administration of customs duties and related matters in Australia. This Act introduced a mechanism by which the Chief Executive Officer of Customs can grant Tariff Concession Orders (TCOs) to reduce customs duties on certain goods, provided they meet specified criteria. The 2011 Tariff Concession Instrument No. 1046700 was introduced to address the specific needs of the welding industry by allowing for tariff concessions on certain wire feeders, recognising that these goods were not produced in Australia and therefore did not have local substitutes. The instrument was made following an application by Welding Industries of Australia, and the CEO's decision was based on the absence of substitutable goods produced domestically, as required by the Act. The policy objective of this measure was to support the welding industry by reducing the cost of importing certain wire feeders, thereby potentially enhancing competitiveness and availability of these goods within Australia.
Scope and Application
The Customs Act 1901, specifically through Tariff Concession Orders (TCOs) under Part XVA, applies to individuals and entities seeking tariff concessions on imported goods that are not produced in Australia and do not have substitutable goods produced locally. This legislation facilitates lower rates of customs duty for specific goods, thereby benefiting importers by reducing their duty costs. The application process requires an individual or entity to apply to the Chief Executive Officer of Customs, who must determine if the application meets the core criteria, including the absence of substitutable goods produced in Australia. The geographic reach of this Act is national, as it applies across Australia, and its application can be extended through subordinate instruments such as the Customs Tariff Act 1995. Exclusions under this Act pertain to goods specified in section 269SJ, which cannot be subject to a TCO. The instrument in question, TCO No. 1046700, applies to certain wire feeders, granting them a free rate of duty instead of the general 5% rate, and came into effect from the date of application, 03 January 2011.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1046700 (Section 269F, 269C, 269P(3), and 269K(1)) detail the process by which a Tariff Concession Order (TCO) can be applied for and granted by the Chief Executive Officer (CEO) of Customs. An applicant, such as Welding Industries of Australia in this instance, can request a TCO for specific goods if the CEO determines that the goods meet the core criteria, which involves assessing whether substitutable goods are produced in Australia (Section 269C). If the application is deemed valid, the CEO must issue a TCO specifying the reduced rate of customs duty, as outlined in the Tariff Concession Instrument. Furthermore, the CEO is obligated to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO application (Section 269K(1)).
The obligations imposed by the Act on the parties or entities it governs are primarily centred around the application process for a TCO. The CEO of Customs must diligently assess whether the application meets the core criteria, specifically that no substitutable goods are produced in Australia on the date the application is lodged (Section 269C). This assessment requires a thorough review of the production status of goods in Australia and their substitutability with the goods in question. Additionally, the CEO must promptly publish a notice in the Gazette upon accepting a TCO application as valid, inviting any person who believes the TCO should not be made to lodge a submission (Section 269K(1)).
In terms of penalties and consequences, the Act does not explicitly outline specific offences or penalties for breaches related to TCO applications. However, any failure to comply with the procedural requirements for making a TCO or any misrepresentation in an application could potentially lead to legal challenges or administrative actions. The consequences primarily revolve around the administrative process and the validity of the TCO itself rather than criminal penalties. The Act ensures that the rights of individuals are protected and that the TCO does not retroactively disadvantage or impose liabilities on any person (Section 269S(1)). This means that while the rights of importers are positively affected by the TCO, the Act safeguards against any negative repercussions for actions taken prior to the TCO's registration date.