EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1102984
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.
BOC Limited applied for a TCO in respect of certain welding hose assemblies on 19 January 2011.
Instrument
TCO No 1102984 was made on 18 April 2011. It declares that those certain welding hose assemblies 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. 1102984 is taken to have come into force on 19 January 2011.
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 the administration of customs and excise duties in Australia. Part XVA of this Act introduces a scheme where Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). The Tariff Concession Instrument No. 1102984, issued in 2011, is a specific example of such an order that addresses the gap in duty concessions for certain goods not produced domestically, aiming to stimulate imports and economic efficiency. The CEO, after reviewing an application from BOC Limited for certain welding hose assemblies, determined that no substitutable goods were produced in Australia, satisfying the core criteria. Consequently, a TCO was issued, granting a free rate of duty on these items, down from the general rate of 5%. This instrument reflects the policy objective of facilitating trade by reducing the cost of importing specific goods.
Scope and Application
The Tariff Concession Instrument No. 1102984, issued under the Customs Act 1901, applies to the goods specified in the instrument, namely certain welding hose assemblies, and provides for a concession in customs duty for these goods. This legislation is applicable to any entity or individual importing these specific welding hose assemblies into Australia, effectively reducing the customs duty on these goods from the general rate of 5% to free, provided the CEO of Customs is satisfied that no substitutable goods are produced in Australia in the ordinary course of business. The scope of this Act is limited to the specified goods and does not extend to other types of goods or industries unless they meet the criteria outlined in the Act. The instrument extends its application through subordinate instruments as necessary, but the primary focus remains on the specified welding hose assemblies. The Act's application is national in scope, aligning with the overarching framework of the Customs Act 1901, which governs customs duties across Australia. Any exclusions or exemptions are limited to goods specified in section 269SJ of the Act, which are ineligible for tariff concession orders.
Key Provisions
The primary operative sections of this legislation include section 269C, which stipulates that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). Section 269P(3) further mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, a written order must be made (s 269P(3)). Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (s 269K(1)). Subsection 269S(1) provides that the TCO is deemed to come into force on the day the application for the TCO was lodged (s 269S(1)).
The obligations imposed on parties or entities by this Act are primarily directed towards the CEO of Customs. The CEO must ensure that any TCO application that is not in respect of goods specified in section 269SJ of the Act is assessed against the core criteria outlined in section 269C. If satisfied that these criteria are met, the CEO is required to make a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties as soon as practicable after accepting a TCO application as valid (s 269K(1)). The CEO is also required to consider any submissions received and make a final decision on whether to grant the TCO.
Failure to comply with the requirements of this Act can result in significant consequences. Although the explanatory statement does not specify particular offences or penalties for non-compliance, breaches of customs regulations generally can lead to both civil and criminal penalties under other sections of the Customs Act 1901. Civil penalties may include fines, and in severe cases, criminal penalties such as imprisonment can be imposed. The exact penalties depend on the nature and severity of the breach, as well as other relevant laws and regulations.