EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1052172
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.
Hewsaw Pty Ltd applied for a TCO in respect of certain wood saw machine knives on 26 November 2010.
Instrument
TCO No 1052172 was made on 28 February 2011. It declares that those certain wood saw machine knives 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. 1052172 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 Commonwealth Parliament, includes provisions for the creation of Tariff Concession Orders (TCOs) under Part XVA. This part of the Act was introduced to address the issue of ensuring that certain goods, which are not produced in Australia or are not substitutable by locally produced goods, are eligible for a reduced rate of customs duty. The policy objective is to facilitate the import of goods that are not manufactured domestically, thereby potentially lowering costs for businesses and consumers while encouraging the use of imported products where local alternatives do not exist. The instrument in question, Tariff Concession Instrument No. 1052172, was made by the Chief Executive Officer of Customs on 28 February 2011, following an application by Hewsaw Pty Ltd for a TCO on certain wood saw machine knives. The instrument was effective from 26 November 2010, the date the application was lodged, and provides a zero rate of duty on the specified goods, which otherwise attract a 5% duty rate. The instrument also ensures that it does not adversely affect any rights or impose any liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901 applies to individuals and entities involved in the importation of goods into Australia, particularly those seeking tariff concessions for specific goods through the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The Act provides a framework for the application and assessment of TCOs, where a lower rate of customs duty applies to goods specified in such orders. The scope of the Act extends to goods that are not produced in Australia in the ordinary course of business and for which no substitutable goods are available domestically. It excludes goods listed in section 269SJ of the Act, which cannot be subject to a TCO. The Act operates nationally across the Commonwealth of Australia, with the TCOs themselves taking effect from the date the application is lodged. Additionally, the Act may be further refined or extended through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the applicable tariff items for goods under a TCO.
Key Provisions
The Customs Act 1901, specifically Part XVA, enables the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) that reduce the rate of customs duty on certain goods. The core criteria for issuing a TCO are outlined in sections 269C, 269D, 269E and 269F. An applicant must demonstrate that no substitutable goods are produced in Australia in the ordinary course of business for the goods in question. Substitutable goods are defined in section 269D as goods produced in Australia that are used, or can be used, for the same purpose as the goods for which the TCO is being applied.
The CEO's obligations under the Act are primarily administrative. Once an application is received, the CEO must determine whether it meets the core criteria. If the application satisfies these criteria, the CEO is required to make a written TCO. The CEO must also publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made. In the case of TCO No. 1052172, the CEO received no such submissions.
Breach of the Act or failure to comply with its requirements can lead to various consequences. However, the explanatory statement does not specify any particular offences or penalties related to TCOs. The general implication is that non-compliance with the Act could result in legal action, which may include civil or criminal penalties depending on the nature and severity of the breach. The specifics of such penalties would depend on other relevant provisions within the Customs Act 1901 or other applicable legislation.