EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1048036
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.
Cutting Edge Diamond Tools Pty Ltd applied for a TCO in respect of certain wall saws on 27 October 2010.
Instrument
TCO No 1048036 was made on 17 January 2011. It declares that those certain wall saws 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. 1048036 is taken to have come into force on 27 October 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, establishes a framework for managing customs duties, including the ability for the Chief Executive Officer of Customs to grant tariff concession orders (TCOs) that reduce the customs duty payable on certain imported goods. The Act was introduced to address the need for a streamlined process to facilitate the import of goods that do not have Australian-made equivalents, thereby supporting economic efficiency and competitiveness. The Tariff Concession Instrument No. 1048036, published under the Customs Act, grants a tariff concession to Cutting Edge Diamond Tools Pty Ltd for certain wall saws, reducing their customs duty rate from 5% to free. The policy objective of this specific TCO is to ensure that the import of these wall saws is facilitated without imposing any disadvantage or liability on importers or other stakeholders, while encouraging the import of goods that do not have locally produced substitutes.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the process by which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This legislation applies to any person who wishes to apply for a TCO in respect of goods, provided that the goods do not fall under the exclusions listed in section 269SJ. For an application to be considered, the CEO must be satisfied that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. If the application meets the core criteria set out in sections 269B, 269C, 269D, and 269E of the Act, the CEO is required to make a written order granting the tariff concession. TCO No. 1048036, made on 17 January 2011, exemplifies this process, as it was issued for certain wall saws after it was determined that no substitutable goods were produced in Australia. This instrument effectively reduced the customs duty on these goods from the general rate of 5% to free. The TCO applies nationally across Australia and does not impose any new liabilities on persons other than the Commonwealth.
Key Provisions
The primary operative sections of this legislation, found under Part XVA of the Customs Act 1901, include sections 269C, 269F, 269S, and 269P. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application complies with the core criteria outlined in section 269C and does not pertain to goods listed in section 269SJ, they are required to make a TCO as per section 269P. This TCO provides for a lower rate of customs duty on the specified goods. The instrument in question, TCO No. 1048036, declares that certain wall saws are subject to a duty-free rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, effective from 27 October 2010.
The Act imposes several obligations on parties involved in the TCO process. Firstly, the CEO must ensure that the TCO application meets the core criteria, which includes verifying that no substitutable goods are produced in Australia at the time of application. Secondly, the CEO is obligated to publish a notice in the Gazette inviting any person to submit reasons why the TCO should not be made, as outlined in section 269K(1). In this instance, no submissions were received, allowing the CEO to proceed with issuing TCO No. 1048036. Additionally, the Act requires the CEO to consider whether the goods specified in the TCO application are eligible for concession based on the absence of substitutable goods produced domestically, as stipulated in section 269C.
Breach of the obligations and requirements outlined in the Act can result in various civil and criminal consequences. Although specific offences are not detailed in the explanatory statement, non-compliance with the conditions of a TCO could lead to legal actions under the Customs Act 1901. For instance, if a person knowingly imports goods subject to a TCO and falsely claims tariff concessions, they could face penalties for fraudulent activities. The penalties for such offences can include fines and imprisonment, although the exact maximum penalties are not specified in the provided text. Furthermore, the TCO does not impose any liabilities on persons other than the Commonwealth, ensuring that no one is disadvantaged by the concession granted to the specified goods.