EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1116298
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.
Simcoa Operations Pty Ltd applied for a TCO in respect of certain telescopic chutes on 23 May 2011.
Instrument
TCO No 1116298 was made on 08 August 2011. It declares that those certain telescopic chutes 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. 1116298 is taken to have come into force on 23 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 Tariff Concession Instrument No. 1116298, enacted in 2011, amends the Customs Act 1901 to address the need for tariff concessions on specific goods. This legislative instrument facilitates tariff reductions on particular goods by allowing the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) under Section 269F of the Act. The objective of this Act is to lower the customs duty on goods where no substitutable products are produced domestically, thereby encouraging the importation of goods that are not manufactured in Australia. This policy aims to benefit importers by potentially reducing their duty liabilities and improving access to a wider range of goods at reduced rates. The instrument came into force on the date the application was lodged, May 23, 2011, and no submissions opposing the concession were received during the consultation period.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the scheme for Tariff Concession Orders (TCO) that may be issued by the Chief Executive Officer of Customs (CEO). This legislation applies to any person or entity seeking to import goods that may be eligible for a lower rate of customs duty if a TCO is granted. The application process involves satisfying the CEO that the goods do not have substitutable alternatives produced in Australia and meet other specified criteria. The geographic reach of this Act is national, applying across Australia. Notably, the Act excludes certain goods from eligibility for a TCO, as outlined in section 269SJ, which lists items that cannot be subject to such concessions. The Act’s application can be extended or modified through subordinate instruments, although the primary focus remains on ensuring that eligible imported goods benefit from reduced customs duties, thereby promoting fair trade practices.
Key Provisions
The main operative sections of this legislation pertain to the making of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901. Section 269F allows for applications to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided they do not fall under the prohibitions listed in section 269SJ. If the CEO is satisfied that the application meets the core criteria specified in section 269C, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. In this instance, TCO No. 1116298 was made on 8 August 2011, declaring that certain telescopic chutes are subject to item 50 of Schedule 4, with a duty rate of free, as opposed to the general rate of 5%.
The obligations and requirements imposed by the Act on the parties it governs are primarily on the CEO. Once an application is deemed valid, the CEO must publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). In this case, no submissions were received. Additionally, the CEO must ensure that the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). This involves confirming that the goods in question are not being produced domestically in a manner that could substitute for the imported goods (section 269D). The CEO's decision to grant the TCO must be based on this assessment.
The legislation does not explicitly state civil or criminal penalties for breach. However, the failure to comply with the requirements set out in the Customs Act 1901 or the misuse of TCOs could lead to legal consequences under other sections of the Act or related legislation. For example, any misrepresentation or fraudulent application could potentially be prosecuted under sections that deal with false statements or fraud, which may carry penalties such as fines or imprisonment. The specific penalties would depend on the nature and severity of the breach.
The commencement of TCO No. 1116298 is effective from the date the application was lodged, 23 May 2011 (subsection 269S(1)). This means that the tariff concessions apply retroactively from that date, allowing for refunds of duty on goods imported since then under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not affect the rights of any person, other than the Commonwealth, in a way that disadvantages them or imposes liabilities for actions taken before the TCO was registered. Importers, however, stand to benefit from this arrangement as they can apply for duty refunds on applicable goods.