EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1119819
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.
Baker and McCauliffe Holdings Pty Ltd applied for a TCO in respect of certain Stainless Steel Cloth on 21 June 2011.
Instrument
TCO No 1119819 was made on 12 September 2011. It declares that those certain Stainless Steel Cloth 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. 1119819 is taken to have come into force on 21 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 Commonwealth Parliament, addresses the need for a streamlined process to provide tariff concessions for certain imported goods under specific conditions. This Act empowers the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce customs duty for goods not produced in Australia, thereby encouraging the importation of these goods and potentially benefiting the market. The policy objective behind this Act is to facilitate the importation of goods where no domestic production exists, thus promoting competition and consumer choice. Instrument No. 1119819, made under the authority of this Act, exemplifies its application by granting a tariff concession for certain Stainless Steel Cloth, effectively reducing the duty rate from 5% to free, in response to an application from Baker and McCauliffe Holdings Pty Ltd. The process involved publishing a notice in the Gazette and receiving no objections, ensuring that the TCO was made in accordance with the legislative requirements.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 1119819, pertains to the establishment of Tariff Concession Orders (TCOs) that lower the rate of customs duty on specified goods, in this case certain Stainless Steel Cloth, provided no substitutable goods are produced in Australia in the ordinary course of business. This legislation applies to entities and individuals who are involved in the importation of these specified goods, potentially including businesses that import Stainless Steel Cloth. The geographic scope of this legislation is national, as it is enacted under the authority of the Commonwealth of Australia. The application of the Act is restricted by exclusions set forth in section 269SJ, which specifies goods that cannot be subject to a TCO. The TCO in question came into effect on the date the application was lodged, 21 June 2011, and it does not disadvantage any person by affecting rights or imposing liabilities in respect of actions taken prior to its registration.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) as it pertains to Tariff Concession Orders (TCOs) include sections 269F, 269C, 269B, and 269P. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. Section 269C states that the CEO must make a written order if the application meets the core criteria, which is determined by section 269C. The core criteria are met if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269B). The CEO must then declare 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 applies (section 269P(3)). This tariff concession results in a lower rate of customs duty for the goods specified in the TCO.
The Act imposes several obligations on the parties involved. The CEO must ensure that any application for a TCO is not in respect of goods specified in section 269SJ, which sets out those goods that cannot be subject to a TCO. The CEO is also required to publish a notice in the Gazette, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). This ensures that the process is transparent and allows for any objections to be raised. Additionally, the CEO must decide whether the application meets the core criteria outlined in section 269C of the Act.
Breaches of the provisions set out in the Act can lead to both civil and criminal consequences. While the Explanatory Statement does not detail specific offences or penalties, it is understood that the Act contains provisions for enforcement and compliance. Typically, breaches of customs legislation can result in fines and imprisonment, depending on the severity of the offence. The maximum penalties are not explicitly stated in this explanatory statement, but they can be found in other sections of the Customs Act 1901. The enforcement of these penalties is designed to ensure compliance with the Act and to maintain the integrity of the customs duty system.