EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1121190
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.
Palfram Australia applied for a TCO in respect of certain panels on 28 June 2011.
Instrument
TCO No 1121190 was made on 21 November 2011. It declares that those certain panels 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. 1121190 is taken to have come into force on 28 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 was enacted to provide a framework for the administration of customs duties and tariffs in Australia. The Act was introduced to address the need for a structured system to manage the import and export of goods, ensuring that customs duties are collected and managed efficiently while facilitating international trade. The Customs Act 1901 establishes the authority of the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which provide for a lower rate of customs duty on certain goods under specified conditions. The Tariff Concession Instrument No. 1121190, enacted in 2012, is a specific instance where the CEO granted a concession, reducing the duty on certain panels from the general rate of 5% to free, following an application by Palfram Australia. The process involved ensuring that no substitutable goods were being produced in Australia, thereby meeting the core criteria set out in the Act. The instrument was introduced following consultation and public notice, with no objections received, and it came into effect on the date the application was lodged, providing immediate benefit to importers eligible for duty refunds.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the implementation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to specific goods that meet certain criteria, particularly when no substitutable goods are produced in Australia in the ordinary course of business. The Act applies to any person who applies for a TCO concerning goods, with the application process involving a determination by the CEO as to whether the core criteria are met. Once the CEO is satisfied that an application meets the criteria, a TCO is made, applying a lower rate of customs duty to the specified goods. The application and effect of TCOs are governed by the Customs Act and are further detailed in the Customs Tariff Act 1995. Notably, the TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person. The geographic reach of the Act is Commonwealth-wide, as it is a federal statute. The application of the Act is not restricted by subordinate instruments beyond what is specified in the primary legislation and the Customs Tariff Act.
Key Provisions
The Customs Act 1901, specifically under Part XVA, provides the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). A TCO allows for a lower rate of customs duty on specified goods. To apply for a TCO, a person must submit an application to the CEO, who will assess whether the application meets the core criteria (section 269C). These criteria require that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Substitutable goods are defined as those produced in Australia that can be used in the same way as the goods in question (sections 269D and 269E). If the CEO is satisfied that the application meets these criteria, they must make a written TCO (section 269P(3)).
The obligations imposed by the Act on the parties involved include the requirement for the CEO to publish a notice in the Gazette, inviting submissions from any interested parties who may oppose the making of a TCO (subsection 269K(1)). In the case of TCO No 1121190, no submissions were received in response to this notice. Additionally, once a TCO is made, it is taken to have come into force on the date the application was lodged (subsection 269S(1)). TCO No 1121190, for example, is considered to have come into force on 28 June 2011. This means that importers of the goods specified in the TCO can apply for a refund of duty paid on those goods from the date the TCO was lodged (paragraph 126(1)(r) of the Regulations). Importantly, a TCO does not affect the rights of any person other than the Commonwealth in a way that disadvantages them or imposes new liabilities for actions taken before the TCO came into force.
In terms of consequences for breach, the Act does not explicitly outline specific offences, penalties, or consequences for failing to comply with a TCO or its associated processes. However, general provisions within the Customs Act 1901 and related regulations may apply to any breaches of customs laws, including potential penalties for fraudulent activities or incorrect declarations. For example, under section 260 of the Customs Act 1901, penalties can be imposed for making false statements or using false documents, with maximum penalties including fines and imprisonment. The specifics of penalties would depend on the nature and severity of the breach.