EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1106403
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.
Bunbury Port Authority applied for a TCO in respect of certain structural steel wharf parts on 16 February 2011.
Instrument
TCO No 1106403 was made on 03 May 2011. It declares that those certain structural steel wharf parts 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. 1106403 is taken to have come into force on 16 February 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 Parliament of Australia, provides a framework for the administration of customs and excise in Australia. The Act, specifically Part XVA, allows for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at reducing the customs duty on specific goods. This mechanism was introduced to address the issue of ensuring that certain goods, for which no domestic production exists, can be imported at a lower tariff rate, thereby benefiting industries reliant on the importation of such goods. The explanatory statement for Tariff Concession Instrument No. 1106403, made on 3 May 2011, illustrates this process in action, where the CEO granted a concession for certain structural steel wharf parts, reducing their tariff from 5% to free, based on the absence of substitutable goods produced in Australia. The legislative process involved publication of the application in the Gazette to allow for public submissions, which in this instance, did not occur. The policy objective is to facilitate the import of goods that cannot be produced domestically, thus supporting industries that rely on these imports.
Scope and Application
The Customs Act 1901, specifically Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to individuals and entities that seek tariff concessions on goods imported into Australia, provided the goods are not listed in section 269SJ as ineligible. The application process requires that no substitutable goods are being produced in Australia at the time the application is made, as outlined in section 269C. The CEO's decision to grant a TCO is based on meeting the core criteria, and once granted, the TCO specifies the reduced or free customs duty on the eligible goods. The geographic scope of this legislation is national, applying across all states and territories within Australia. The explanatory statement for Instrument TCO No. 1106403, which pertains to certain structural steel wharf parts, indicates that it was made on 3 May 2011, and the application is deemed to have come into force on 16 February 2011, the date the application was lodged. The TCO does not affect the rights of any party as of the registration date, thereby not imposing any liabilities or disadvantaging anyone, except for potentially providing benefits to importers by allowing them to apply for duty refunds on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1106403, pursuant to the Customs Act 1901, are sections 269C, 269F, 269K, and 269P. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods, while section 269C stipulates that an 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. Section 269P(3) mandates that if the CEO is satisfied that an application meets the core criteria, a written TCO must be made. Additionally, section 269K requires the CEO to publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission.
Under the Customs Act 1901, the CEO has specific obligations and requirements when handling TCO applications. Once an application is accepted as valid, the CEO must publish a notice in the Gazette as soon as practicable, inviting submissions from any person who believes the TCO should not proceed. If no submissions are received, the CEO must proceed with the assessment. The CEO is also required to determine whether the application meets the core criteria by confirming that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO must issue a TCO.
In terms of offences, penalties, or consequences, the Customs Act 1901 does not explicitly outline specific criminal or civil penalties for breaching a TCO or its provisions. However, general provisions within the Act and associated regulations may apply to any unlawful activities related to customs duties and tariffs. For instance, section 240 of the Customs Act 1901 provides for penalties for fraudulent or false statements, which may be applicable if a TCO is breached through misrepresentation or fraud. Additionally, section 285 provides for civil penalties for breaches of the Act, which could include fines or other financial penalties as determined by the courts.
The Tariff Concession Instrument No. 1106403, which came into force on 16 February 2011, does not affect the rights of any person other than the Commonwealth as at the date of registration, nor does it impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration. Importers of the goods subject to the TCO will benefit from the tariff concession, and they can apply for a refund of duty on goods imported since the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations. The rights of the Commonwealth and affected importers are thus preserved and enhanced by the provisions of this Instrument.