EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1118280
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 08 June 2011.
Instrument
TCO No 1118280 was made on 22 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. 1118280 is taken to have come into force on 08 June 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, established a framework for the application of customs duty through Tariff Concession Orders (TCOs). This Act was introduced to address the need for a streamlined process in granting tariff concessions to ensure that certain goods, which are not produced domestically, are subject to lower customs duties. This facilitates the importation of specific goods that are crucial for various industries without imposing undue burdens on consumers or businesses. The Tariff Concession Instrument No. 1118280, made on 22 August 2011, exemplifies this legislative intent by providing tariff concessions for certain channel struts, effectively setting their duty rate to free, provided no substitutable goods are produced in Australia. This legislative measure aligns with the overarching policy objective of supporting domestic industries by ensuring competitive pricing for imported goods that are not manufactured locally.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the application for Tariff Concession Orders (TCO) that provide for lower rates of customs duty on specified goods. This Act applies to any person or entity seeking to import goods that are not specified in section 269SJ of the Act, which details goods ineligible for tariff concessions. The process involves an application to the Chief Executive Officer of Customs, who evaluates whether the application meets the core criteria, such as the absence of substitutable goods produced in Australia. If the criteria are met, a TCO is issued, specifying a reduced duty rate on the goods, as was the case with Binder Group Pty Ltd's application for certain channel struts, where the duty rate was reduced from 5% to free. The geographic reach of this Act is national, applying uniformly across Australia. The Act mandates the publication of TCO applications in the Gazette, inviting public submissions, although in this instance, none were received. The commencement date of a TCO aligns with the date the application was lodged, ensuring timely benefits to importers who may apply for duty refunds on imports made from the effective date of the TCO. The Act does not retroactively affect the rights or impose liabilities on persons other than the Commonwealth, safeguarding the interests of all parties involved.
Key Provisions
The main operative sections of this legislation concern the making and effect of Tariff Concession Orders (TCOs). Section 269F of the Customs Act 1901 allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. If the CEO determines that the application meets the core criteria, they must make a written order, which is the TCO (section 269P(3)). This particular TCO, No. 1118280, applies to certain channel struts and was made on 22 August 2011, declaring that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995. This means that while the general rate of duty on these goods is 5%, the TCO reduces this rate to free.
The Act imposes several obligations and requirements on the parties it governs. The CEO is required to decide whether an application for a TCO meets the core criteria, which involves assessing whether no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Additionally, as soon as practicable after accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). The TCO itself 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 in respect of anything done or omitted to be done before the date of registration (subsection 269S(4)).
In terms of potential consequences, while the Act does not explicitly detail offences or penalties for breach, any failure to comply with the requirements of the Act or the TCO could potentially lead to legal challenges or administrative actions. For instance, if the CEO makes a TCO without meeting the core criteria, this could be subject to judicial review or other legal remedies. Furthermore, the Customs Act 1901 contains other provisions that may apply in cases of non-compliance, such as penalties for incorrect declarations or fraud. It is important for all parties involved to adhere strictly to the terms and conditions outlined in the legislation to avoid any legal repercussions.