EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1114023
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.
Austral Precast Pty Ltd applied for a TCO in respect of certain precast concrete wall panel rotators on 03 May 2011.
Instrument
TCO No 1114023 was made on 18 July 2011. It declares that those certain precast concrete wall panel rotators 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. 1114023 is taken to have come into force on 03 May 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 for the imposition of customs duty on goods imported into Australia. It establishes a framework through which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs, allowing for lower rates of duty to be applied to certain goods. This is achieved through Part XVA of the Act, which allows the CEO to make a TCO if specific criteria are met, such as the absence of substitutable goods produced in Australia. The policy objective behind this mechanism is to facilitate the import of goods that are not domestically produced, thereby supporting industries that rely on imported materials or components. The Tariff Concession Instrument No. 1114023, introduced to address a specific application from Austral Precast Pty Ltd for tariff concessions on precast concrete wall panel rotators, exemplifies the Act’s intent to provide targeted relief to businesses that can demonstrate a lack of local production alternatives. This instrument ensures that such businesses are not unduly burdened by customs duties, aligning with the broader goal of fostering a competitive and efficient import market.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the procedures for Tariff Concession Orders (TCOs), which provide for a lower rate of customs duty on certain goods. This legislation applies to any person or entity seeking to import goods that are not produced in Australia in the ordinary course of business, as defined by the Act. The scope of the Act is national, as it is a Commonwealth law, and it extends to any goods that can be subject to a TCO, provided they do not fall under the specific exclusions outlined in section 269SJ. The application process requires an applicant to demonstrate that no substitutable goods are produced in Australia, as per section 269C, and this is subject to review by the Chief Executive Officer of Customs (CEO). If the CEO determines that the application meets the core criteria, a TCO is issued, effectively granting a duty concession on the specified goods. The Act also mandates consultation with interested parties by publishing notices in the Gazette, although in the case of TCO No. 1114023, no submissions were received. The TCO applies retroactively to the date of the application, ensuring that the rights of importers are protected and that they can apply for refunds on duties paid prior to the TCO’s effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1114023 under the Customs Act 1901 are sections 269C, 269P(3), and 269S(1). Section 269C specifies the core criteria that must be satisfied for a Tariff Concession Order (TCO) to be granted, which requires that 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 Chief Executive Officer (CEO) of Customs is satisfied that these criteria are met, they must make a written TCO. Finally, section 269S(1) states that a TCO is deemed to come into force on the date the TCO application was lodged.
The obligations imposed by this Act on the parties it governs are primarily centered around the application and review process for TCOs. The CEO of Customs must ensure that any TCO application is assessed against the core criteria outlined in section 269C. If the application meets these criteria, the CEO must make a written TCO, as per section 269P(3). Furthermore, the CEO is required to publish a notice in the Gazette, inviting submissions from any person who may have reasons to oppose the granting of a TCO, as per section 269K(1). If no submissions are received, the TCO can be issued without further ado.
Breaching the requirements set out by the Act may result in both civil and criminal consequences. For instance, any person who knowingly provides false or misleading information in a TCO application could face civil penalties under the Administrative Appeals Tribunal Act 1975 or even criminal charges for fraud under the Criminal Code Act 1995. The maximum penalties for such offences can be substantial, including fines of up to $22,200 for individuals and $111,000 for corporations, depending on the specific offence and jurisdiction. Additionally, any person who intentionally contravenes the Act may be subject to legal action, including injunctions or other remedies available under the law. The seriousness of these penalties underscores the importance of compliance with the Act’s requirements.