EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1055901
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.
Reliance Worldwide applied for a TCO in respect of certain abrasive shot blasting machines on 23 December 2010.
Instrument
TCO No 1055901 was made on 21 March 2011. It declares that those certain abrasive shot blasting machines 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. 1055901 is taken to have come into force on 23 December 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 was enacted by the Australian Parliament to establish a comprehensive framework for the administration of customs and excise in Australia. This legislation provides the authority for the regulation of the import and export of goods, including the imposition and collection of duties and taxes. One specific feature of the Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which allows the Chief Executive Officer of Customs to apply lower rates of customs duty on certain goods, provided that specific criteria are met. This mechanism was introduced to address the problem of ensuring that Australian industries can compete fairly in the global market by reducing the cost of imported goods that do not have local substitutes, thereby encouraging trade and economic growth. The policy objective is to support Australian industries and consumers by potentially lowering the cost of essential imported goods.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 1055901, governs the application process for Tariff Concession Orders (TCOs), which allow for a lower rate of customs duty on specified goods. This legislation applies to any person or entity seeking to import goods eligible for tariff concessions. The scope of the Act includes the determination of whether the goods in question are substitutable by Australian-produced goods and whether they are produced in the ordinary course of business. The Act's jurisdictional reach extends across the Commonwealth of Australia, with the Chief Executive Officer of Customs holding the authority to make TCOs. Notably, the Act excludes certain goods from being subject to TCOs, as specified in section 269SJ. The application of the Act can be further refined through subordinate instruments, which may provide additional criteria or details on the process for making TCO applications. The commencement of a TCO is effective from the date the application is lodged, and it does not retroactively affect any rights or impose liabilities for actions taken before its registration.
Key Provisions
The main operative sections of this legislation, Tariff Concession Instrument No. 1055901, detail the process and criteria for the granting of Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). Specifically, section 269C requires that a TCO application meets core criteria if, at the time of application, no substitutable goods are produced in Australia in the ordinary course of business. Furthermore, section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that these criteria are met, a written order must be made, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a specified rate of duty.
The Act imposes several obligations on the parties involved. The CEO must ensure that any TCO application is not for goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. Additionally, the CEO must publish a notice in the Gazette inviting any person to submit reasons why a TCO should not be made, as required by subsection 269K(1). If no submissions are received, the CEO proceeds to make the TCO. Importers, once the TCO is in effect, have the right to apply for a refund of duty paid on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations.
There are no explicit offences, penalties, or consequences for breach detailed in the explanatory statement. However, non-compliance with the conditions or failure to adhere to the stipulated process could potentially lead to disputes over the validity of the TCO, as well as challenges in the enforcement of duty refunds. The legislation ensures that the TCO does not affect the rights of any person adversely or impose liabilities for actions taken before the registration date, thereby providing a safeguard against retrospective disadvantage.