EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1052012
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.
Lincoln Sentry applied for a TCO in respect of certain wax filler sticks on 26 November 2010.
Instrument
TCO No 1052012 was made on 28 February 2011. It declares that those certain wax filler sticks 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. 1052012 is taken to have come into force on 26 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, established a framework for managing customs duties, including the ability to create Tariff Concession Orders (TCOs) through which certain goods could be subjected to lower rates of customs duty. This legislative approach aimed to address the need for flexibility in customs duty rates to foster economic growth and competitiveness by reducing costs for specific imported goods. TCO No. 1052012, made under the Customs Act 1901, responds to an application by Lincoln Sentry for a tariff concession on certain wax filler sticks, effective from 26 November 2010. The instrument was created after the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, meeting the core criteria for a concession. This initiative was introduced to benefit importers by allowing them to apply for duty refunds on goods imported since the effective date of the concession, thereby encouraging the import of these goods without the imposition of any additional liabilities.
Scope and Application
The Customs Act 1901, as amended, establishes a framework through which the Chief Executive Officer of Customs can grant Tariff Concession Orders (TCOs) to reduce the customs duty on specific goods. These concessions apply to goods for which an applicant demonstrates that there are no substitutable goods produced in Australia in the ordinary course of business. The process involves the CEO reviewing the application against the core criteria set out in section 269C, which requires that no substitutable goods are produced in Australia. Should the application meet these criteria, the CEO is obligated to issue a TCO, which specifies a lower rate of customs duty on the goods in question. The application and issuance of TCOs are governed by Part XVA of the Customs Act 1901, and the specific concessions are detailed in Schedule 4 of the Customs Tariff Act 1995. The application process also requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties, although in the case of TCO No 1052012, no such submissions were received. The TCO applies from the date the application was lodged, offering benefits to importers who can apply for duty refunds on imports since that date, without imposing any new liabilities.
Key Provisions
The main operative sections of the Customs Act 1901, as referred to in the Explanatory Statement for Tariff Concession Instrument No. 1052012, include sections 269F, 269C, 269B, 269P, and 269K. Section 269F allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) regarding certain goods. If the application meets the core criteria set out in section 269C, which includes the absence of substitutable goods produced in Australia, the CEO must make a written order (TCO) under section 269P(3). The CEO must also publish a notice in the Gazette, inviting submissions on the proposed TCO, as required by section 269K(1).
The obligations and requirements imposed by the Act on the parties involved are primarily on the CEO, who must assess the validity of the TCO application, determine if the core criteria are met, and make the TCO if the criteria are satisfied. The CEO must also ensure the publication of the notice in the Gazette to allow for any objections or submissions from interested parties. In the case of Tariff Concession Instrument No. 1052012, the CEO did not receive any submissions in response to the published notice. Importers who have imported the goods since the TCO came into force on 26 November 2010 are entitled to apply for a refund of duty under paragraph 126(1)(r) of the Regulations.
The Act does not explicitly outline offences, penalties, or civil/criminal consequences for breaches of the TCO provisions. However, any failure by the CEO to comply with the statutory obligations, such as not making a TCO when the core criteria are met, or not publishing a notice in the Gazette, could potentially result in legal action being taken by affected parties. Similarly, any misuse or fraudulent claims for tariff concessions or duty refunds could be subject to investigation and potential prosecution under other relevant legislation, such as the Crimes Act 1914. The penalties for such offences would depend on the specific circumstances and the relevant legislation under which the prosecution is brought.