EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1107342
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.
Wonderest applied for a TCO in respect of certain textile manufacturing plant, overhead material handling transporters on 25 February 2011.
Instrument
TCO No 1107342 was made on 16 May 2011. It declares that those certain textile manufacturing plant, overhead material handling transporters 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. 1107342 is taken to have come into force on 25 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 Australian Parliament, establishes a framework for the regulation of customs and excise duties, among other things. To address the need for tariff concessions on specific goods, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislative mechanism aims to provide relief on customs duties for certain goods, provided they meet specific criteria, such as the absence of substitutable goods produced in Australia. The Customs Tariff Concession Instrument No. 1107342, introduced in 2011, exemplifies this process by granting a tariff concession for certain textile manufacturing plant, overhead material handling transporters, thereby setting their duty rate to free, down from the general rate of 5%. The policy objective is to facilitate the importation of these goods by reducing their duty burden, which in turn can support economic activities by lowering costs for businesses that import these specific types of goods.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the creation of Tariff Concession Orders (TCO) which apply a lower rate of customs duty to certain goods. This legislation allows for applications by individuals or entities to the Chief Executive Officer of Customs for a TCO on goods that meet specific criteria, notably that no substitutable goods are produced in Australia in the ordinary course of business. Such orders are applicable to the specific goods specified in the application and are subject to a comprehensive review process that includes public consultation. The instrument, TCO No. 1107342, applies to certain textile manufacturing plant, overhead material handling transporters, and effectively nullifies the duty on these goods from the date of the application, 25 February 2011, benefiting importers by potentially allowing them to seek refunds for duties paid on these goods since that date. The application of this Act is Commonwealth-wide, and there are no stated exclusions beyond those goods specified in section 269SJ which cannot be subject to a TCO. The Act allows for further regulation through subordinate instruments, providing flexibility in its implementation.
Key Provisions
The key provisions of Tariff Concession Instrument No. 1107342 are established under sections 269C, 269F, 269P, and 269S of the Customs Act 1901. Section 269F allows an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). Section 269C outlines the criteria for a TCO application, specifically that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied the application meets the criteria, a written order must be made. Section 269S specifies that the TCO comes into force on the date the application is lodged. In this case, the TCO declares that certain textile manufacturing plant, overhead material handling transporters are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a duty rate of free.
The Act imposes several obligations and requirements on the parties involved. Firstly, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions if any person considers there are reasons why the TCO should not be made. Although this requirement was met, no submissions were received in this instance. Secondly, the CEO must ensure the application meets the core criteria as specified in section 269C, which involves verifying that no substitutable goods were produced in Australia on the application date. Lastly, the CEO must make a written TCO if the application meets the criteria, as mandated by section 269P(3).
Breach of the obligations and requirements set out in the Customs Act 1901 can result in both civil and criminal consequences. For instance, if a party fails to adhere to the TCO provisions, they may face penalties under the Customs Act, which can include fines and imprisonment. However, the Explanatory Statement does not detail specific penalties for this particular TCO. It is crucial to note that the TCO itself does not impose any liabilities on any person and does not affect the rights of persons as at the date of registration.