EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1051306
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.
Cable Accessories (Australia) Pty Ltd applied for a TCO in respect of certain UV stabilised, heat shrink, polyolefin tubing on 22 November 2010.
Instrument
TCO No 1051306 was made on 28 February 2011. It declares that those certain UV stabilised, heat shrink, polyolefin tubing 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. 1051306 is taken to have come into force on 22 November 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, provides a framework for the imposition of customs duty on goods imported into Australia. Among its provisions, Part XVA outlines the process for Tariff Concession Orders (TCOs), which reduce or eliminate customs duty on specific goods, provided certain criteria are met. The problem or gap addressed by the Act is the need to facilitate the importation of goods that are not produced domestically, thereby reducing costs for businesses and consumers. TCO No 1051306, made under the authority of the Customs Act, responds to an application from Cable Accessories (Australia) Pty Ltd for tariff concessions on UV stabilised, heat shrink, polyolefin tubing. The instrument was introduced to ensure that these specific goods benefit from a reduced customs duty rate, aligning with the policy objective of encouraging the importation of non-domestically produced goods when no substitutable domestic products exist. The instrument came into force on the date the application was lodged, 22 November 2010, and does not affect existing rights or impose new liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically through Part XVA, provides a mechanism for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that apply a lower rate of customs duty on specified goods. The process involves an application being made to the CEO by a person, who must ensure the goods in question are not specified in section 269SJ of the Act as ineligible for TCOs. The CEO evaluates the application against the core criteria, including whether substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. If the CEO determines that the application meets these criteria, they are required to make a TCO that declares the goods eligible for the specified lower duty rate under the Customs Tariff Act 1995. The geographic scope of this legislation is national, applying to all goods imported into Australia. The commencement of a TCO is deemed to occur on the date the application is lodged, with no retroactive effect on existing duties or liabilities, although it may entitle importers to duty refunds for imports since the effective date.
Key Provisions
The main operative sections of this legislation focus on the process and requirements for making Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods. Section 269C stipulates that the application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269B clarifies the meanings of terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. If the CEO determines that the application meets these core criteria, section 269P(3) mandates that a written TCO must be issued, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods.
The obligations imposed by the Act on the parties and entities it governs are primarily centred around the application process for TCOs. The CEO must, upon accepting a valid application, publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). Furthermore, the CEO must decide whether the application meets the core criteria, specifically checking if substitutable goods were produced in Australia on the application day (section 269C). If satisfied, the CEO must issue a TCO (section 269P(3)). The rights of importers are beneficially affected by this process, allowing them to apply for a refund of duty on goods imported since the TCO is deemed to have come into force (paragraph 126(1)(r) of the Regulations).
The legislation outlines specific consequences for breach, although the explanatory statement does not explicitly detail offences or penalties. However, it is understood that any failure to comply with the requirements for issuing a TCO or any misuse of the concession could potentially lead to civil or criminal consequences. Given the nature of the Act, breaches might result in financial penalties or legal action to enforce compliance with the terms of the TCO and the underlying Customs Act 1901. While maximum penalties are not specified in the explanatory statement, they would typically be defined within the relevant sections of the Customs Act 1901 or related regulations.