EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1116444
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.
Binder Group Pty Ltd applied for a TCO in respect of certain channel struts on 25 May 2011.
Instrument
TCO No 1116444 was made on 19 August 2011. It declares that those certain channel struts 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. 1116444 is taken to have come into force on 25 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 was enacted to establish a framework for customs and excise in Australia, with the Customs Tariff Concession Orders Instrument No. 1116444, made in 2011, addressing specific tariff concessions for certain goods. This instrument was introduced to provide a lower rate of customs duty on certain goods, in this case channel struts, as per an application by Binder Group Pty Ltd. The instrument was enacted by the Chief Executive Officer of Customs (CEO) under section 269F of the Customs Act 1901, ensuring that the application met the core criteria specified in section 269C of the Act. The CEO found that no substitutable goods were produced in Australia, thus allowing for the concession. The instrument's policy objective was to provide relief to importers of these specific goods by granting them a duty-free status, thereby encouraging the importation and use of these goods in Australia.
Scope and Application
The Customs Act 1901, specifically Part XVA, pertains to Tariff Concession Orders (TCOs), which can be applied for by any person seeking a lower rate of customs duty on certain goods. The Act applies to any entity or individual who imports goods into Australia and wishes to avail themselves of the tariff concessions provided under the scheme. The scope of the Act is primarily national, as it governs the process and criteria for applying for and granting TCOs across Australia. The CEO of Customs is the authority responsible for determining whether an application for a TCO meets the core criteria, which includes verifying that no substitutable goods are produced in Australia at the time of the application. Any goods specified in section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO, are excluded from this scheme. The TCO itself is effective from the date the application is lodged and does not disadvantage any person by imposing liabilities for actions taken before the registration of the TCO. Instead, it potentially benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO. The scope of the TCO may be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty applicable to the goods under the TCO.
Key Provisions
The Tariff Concession Instrument No. 1116444, issued under section 269F of the Customs Act 1901, concerns the application of lower rates of customs duty to certain goods, in this case specific channel struts. If the Chief Executive Officer of Customs (CEO) is satisfied that the application for a Tariff Concession Order (TCO) meets the core criteria, as outlined in sections 269C and 269D of the Act, the CEO must issue a written TCO. In this instance, the CEO determined that the channel struts in question are not substitutable by any goods produced in Australia, thereby satisfying the core criteria, and issued TCO No. 1116444 on 19 August 2011. This order specifies that these channel struts are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free rate for these goods, down from the general rate of 5%.
The Act imposes several obligations on the parties involved. The applicant, in this case Binder Group Pty Ltd, must ensure that the goods specified in the application do not have substitutable equivalents produced in Australia and that the application meets the criteria set out in the Act. The CEO must review the application, consider any submissions from the public, and decide whether to issue a TCO. Once a TCO is issued, it is imperative for the CEO to publish a notice in the Gazette inviting any objections to the concession, although no submissions were received in this case. The Act also requires the TCO to come into force on the date the application was lodged, which in this instance was 25 May 2011.
Breaching the provisions of the Customs Act 1901 or attempting to circumvent the conditions of a TCO can lead to significant legal consequences. While the explanatory statement does not detail specific offences or penalties related to TCOs, general provisions of the Customs Act outline that failure to comply with the Act can result in both civil and criminal penalties. For example, providing false or misleading information in an application can attract fines and imprisonment. The severity of the penalties can vary, but they may include substantial fines and imprisonment for serious or repeated offences. Additionally, the Act allows for the recovery of duties and the imposition of interest on unpaid duties, further underscoring the importance of compliance.