EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1102990
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 hoses on 19 January 2011.
Instrument
TCO No 1102990 was made on 18 April 2011. It declares that those certain welding hoses 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. 1102990 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 Commonwealth Parliament, introduced a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This was intended to address the problem of providing tariff concessions for specific goods that are not produced in Australia or for which there are no suitable domestic substitutes. Pursuant to this framework, Tariff Concession Instrument No. 1102990 was enacted on 18 April 2011, in response to an application by BOC Limited for certain welding hoses. The policy objective of the TCO is to provide a lower rate of customs duty for these goods, thereby benefiting importers who can now apply for a refund of duty on goods imported since the date the TCO was taken to have come into force, without imposing any new liabilities.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 1102990, applies to any entity or individual seeking to import goods that qualify for tariff concessions. Specifically, the Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) for goods, which result in a lower rate of customs duty. The application for such concessions is subject to the core criteria specified in section 269C of the Act, which mandates that no substitutable goods should be produced in Australia on the day the application is lodged. This concession is particularly relevant to importers who can benefit from the reduced duty rates, potentially applying for refunds on duties paid for goods imported since the TCO's effective date. The geographic reach of this legislation is national, applying across Australia, and it does not disadvantage or impose liabilities on persons for actions taken prior to the TCO's registration. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties, although in this case, no submissions were received. The TCO is deemed to have come into force on the date the application was lodged, making it retroactively effective for eligible imports from that date.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs, as detailed in sections 269F, 269C, 269B, and 269P(3). A TCO allows for a reduced rate of customs duty on specified goods, provided certain conditions are met. When an application is made under section 269F, the CEO must determine if it complies with the core criteria set out in section 269C, which includes verifying that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269E and 269D. If these criteria are satisfied, the CEO is required to issue a TCO, as outlined in section 269P(3).
For the parties involved, the Act imposes specific obligations. An applicant must submit a valid application under section 269F, ensuring that it does not pertain to goods prohibited by section 269SJ. The CEO must then assess the application against the core criteria and, if satisfied, proceed to make a TCO as per section 269P(3). Additionally, under section 269K(1), the CEO is mandated to publish a notice in the Gazette, inviting submissions from any interested parties. This process ensures transparency and allows stakeholders to voice any concerns regarding the proposed concession.
In terms of potential breaches, the Act does not explicitly detail offences or penalties for non-compliance with TCO provisions. However, failure to adhere to the conditions set forth by the Act or regulations could lead to legal consequences. For instance, incorrect or fraudulent applications might result in civil or criminal charges under other sections of the Customs Act or related legislation, depending on the nature of the breach. While specific penalties are not mentioned in the context of TCOs, general penalties for customs-related offences can include fines and imprisonment, with the exact penalties depending on the severity and circumstances of the offence.