EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1111661
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.
Australian Aerospace Composites applied for a TCO in respect of certain helicopter rear blade producing system on 06 April 2011.
Instrument
TCO No 1111661 was made on 04 July 2011. It declares that those certain helicopter rear blade producing system 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. 1111661 is taken to have come into force on 06 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, governs the importation and exportation of goods across Australia’s borders. Part XVA of the Act provides for the establishment of Tariff Concession Orders (TCOs) that can lower the customs duty rate for specific goods under certain conditions. This provision addresses the problem of ensuring that Australian industries can access critical components and materials at reduced rates, promoting economic growth and competitiveness without unduly burdening the federal budget. Instrument TCO No. 1111661 was introduced on 4 July 2011, following an application by Australian Aerospace Composites for tariff concessions on certain helicopter rear blade producing systems. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, satisfying the core criteria for a TCO. Consequently, the TCO declared that the specified helicopter rear blade producing systems are subject to a free rate of duty, down from the general rate of 5%. This legislative instrument ensures that the rights of importers are beneficially affected, allowing them to apply for refunds on duties paid prior to the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 1111661, made under the Customs Act 1901, applies to the goods specified in the instrument, which in this case are certain helicopter rear blade producing systems. The Act facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which provide for a lower rate of customs duty on specific goods, provided they meet certain criteria. The TCO applies to any entity or individual importing these goods into Australia, as it effectively alters the duty applicable to them from the general rate to free. The geographic reach of this Act is national, applying across all states and territories within Australia. The Act explicitly excludes goods that are specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The application process for a TCO involves an assessment by the CEO to determine if the goods in question meet the core criteria, including the absence of substitutable goods produced in Australia at the time the application is lodged. The instrument was made on 04 July 2011, following an application by Australian Aerospace Composites on 06 April 2011, and the concession is effective as of the date the application was lodged, 06 April 2011.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1111661 (section 269C) require that a Tariff Concession Order (TCO) application meets specific criteria before the Chief Executive Officer of Customs (CEO) can grant it. This includes verifying that no substitutable goods are produced in Australia on the day the application is lodged. Once the CEO is satisfied that the application meets these criteria, they must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). In this instance, the TCO No. 1111661 applies to certain helicopter rear blade producing systems, granting them a free rate of duty as opposed to the general rate of 5%.
The obligations and requirements imposed by the Act on the parties governed by it are primarily on the CEO of Customs. Upon receiving a TCO application, the CEO must assess whether the application meets the core criteria (section 269C). If satisfied, the CEO must publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). In this case, the CEO did not receive any submissions, which likely facilitated the swift issuance of the TCO. The Act also mandates that TCOs come into force on the day the application is lodged (subsection 269S(1)). This means that TCO No. 1111661 is effective as of 06 April 2011, the date the application was made.
The legislation outlines potential offences, penalties, or civil/criminal consequences for breaches, although specific maximum penalties are not detailed in the text. Any failure by the CEO to adhere to the requirements or any improper granting of a TCO could lead to legal ramifications. The Act ensures that the rights of individuals are protected, particularly regarding any liabilities imposed before the registration date of the TCO. Importers of the goods in question benefit from the ability to apply for a refund of duty from the date the TCO came into force (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not disadvantage or impose new liabilities on any person except the Commonwealth.