EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1111259
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.
Wizard Power applied for a TCO in respect of certain sheet metal adhesive film laminators on 04 April 2011.
Instrument
TCO No 1111259 was made on 20 June 2011. It declares that those certain sheet metal adhesive film laminators 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. 1111259 is taken to have come into force on 04 April 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, facilitates the application of reduced customs duty rates on specified goods through Tariff Concession Orders (TCOs). These orders are made by the Chief Executive Officer of Customs (CEO) and provide a lower rate of customs duty for goods not produced in Australia in the ordinary course of business and for which no substitutable goods exist domestically. This legislative framework addresses the gap in providing tariff relief to importers of certain goods that are not manufactured within Australia, thereby promoting fair trade practices and encouraging the importation of goods that would otherwise be uncompetitive due to local production. The policy objective is to support Australian importers by reducing the cost of imported goods, thus enhancing their competitiveness and potentially lowering consumer prices. In the case of TCO No. 1111259, Wizard Power successfully applied for tariff concessions on certain sheet metal adhesive film laminators, resulting in a zero rate of duty on these specific goods.
Scope and Application
The Tariff Concession Instrument No. 1111259 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions on specific goods, namely certain sheet metal adhesive film laminators in this instance. This concession is facilitated by the Chief Executive Officer of Customs, who must determine whether the application meets the core criteria outlined in the Act, specifically if no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this Act is national, as it pertains to customs duties throughout Australia. The application of the Act is restricted by section 269SJ which specifies goods that cannot be subject to a TCO. The instrument extends or restricts application through subordinate instruments as necessary, in this case, confirming the free rate of duty on the specified laminators. The commencement date of this specific TCO is aligned with the date of the application, ensuring that any imports made on or after this date can benefit from the reduced tariff rate.
Key Provisions
The main operative sections of this legislation are sections 269C, 269B, 269D, 269E, 269P(3), and 269SJ of the Customs Act 1901, which together establish the criteria for making a Tariff Concession Order (TCO). Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO. If the CEO is satisfied that the application is valid and meets the core criteria specified in section 269C, they must make a TCO as outlined in section 269P(3). Section 269SJ details the types of goods that cannot be subject to a TCO.
The Act imposes specific obligations on the CEO, who must decide whether a TCO application meets the core criteria set out in section 269C. If the application is deemed valid, the CEO is required to make a written TCO as per section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette, inviting any interested parties to submit any reasons why the TCO should not be made. In this instance, no submissions were received.
The legislation also details the consequences for any breaches. The Act does not specify any civil or criminal penalties for failing to comply with the requirements of the TCO or the process for making one. However, it is important to note that failure to adhere to the terms of a TCO could potentially lead to disputes or legal challenges, though such consequences are not explicitly defined within this explanatory statement.
Furthermore, the Act ensures that the TCO does not affect the rights of any person 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, as per section 269S(1). This means that the rights of importers will be beneficially affected, and they can apply for a refund of duty on goods imported since the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations.