EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1122945
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.
Ramset applied for a TCO in respect of certain adhesives on 11 July 2011.
Instrument
TCO No 1122945 was made on 19 September 2011. It declares that those certain adhesives 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. 1122945 is taken to have come into force on 11 July 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 comprehensive framework for customs duties and related matters, with the aim of regulating the import and export of goods. One of the mechanisms introduced under the Act is the Tariff Concession Order (TCO), which allows for the reduction of customs duties on specific goods. The Tariff Concession Instrument No. 1122945, enacted in 2012, addresses the problem of ensuring that customs duties are only applied when there are no suitable Australian-made alternatives. This instrument was introduced to facilitate trade by providing tariff concessions where appropriate, thereby encouraging the import of goods that cannot be efficiently produced domestically. The policy objective is to ensure that Australian businesses and consumers benefit from reduced costs on certain imported goods, while also promoting competition and efficiency within the domestic market. The instrument was developed and enacted by the Australian Parliament, reflecting a commitment to streamline customs processes and support economic growth through strategic tariff adjustments.
Scope and Application
The Tariff Concession Instrument No. 1122945, made under the Customs Act 1901, applies to goods for which a Tariff Concession Order (TCO) has been granted, effectively providing a reduced rate of customs duty for specified items. This instrument is pertinent to entities or individuals who are engaged in the importation of goods that qualify for tariff concessions, thereby potentially reducing their customs duty liabilities. The instrument's application extends to any goods specified in the TCO, which, in this instance, includes certain adhesives. The geographic reach of this legislation is nationwide, as it operates within the framework of the Commonwealth's customs laws. Notably, the Act does not apply to goods specified in section 269SJ, which outlines those that cannot be subject to a TCO. Additionally, the application of the TCO does not retroactively disadvantage any person or impose liabilities for actions taken before its registration, safeguarding existing rights and obligations. Subordinate instruments may further refine the application and scope of this legislation, providing additional detail or clarification on specific provisions.
Key Provisions
The Customs Act 1901 (the Act) contains provisions for the creation of Tariff Concession Orders (TCOs) through Part XVA, which allow for a lower rate of customs duty to apply to certain goods (s 269F). An application for a TCO can be submitted to the Chief Executive Officer of Customs (the CEO) by a person (s 269C). If the CEO is satisfied that the application is valid and meets the core criteria, 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 (s 269P(3)). For example, TCO No. 1122945 applies to certain adhesives, reducing the duty rate from 5% to free.
The Act imposes several obligations on the CEO when considering a TCO application. Firstly, the CEO must ensure that the application is not in respect of goods specified in section 269SJ of the Act, which cannot be subject to a TCO (s 269F). If the application is valid, the CEO must assess whether it meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). Substitutable goods are defined as goods produced in Australia that can be put to a use corresponding to the use of the goods in question (s 269D). Additionally, the CEO is required to publish a notice in the Gazette, inviting any person to lodge a submission if they believe the TCO should not be made (s 269K(1)).
Breaching the provisions of the Act regarding TCOs could result in civil or criminal consequences. While specific offences, penalties, or consequences are not outlined in the explanatory statement, the Act generally provides for enforcement mechanisms to ensure compliance with its provisions. The CEO’s decisions and actions are guided by the statutory requirements, and any failure to adhere to these could lead to legal repercussions, including potential fines or other penalties as prescribed by law.
The commencement of a TCO is effective from the day the application for the TCO is lodged, as stipulated in the Act (s 269S(1)). This means that the TCO No. 1122945 for certain adhesives is effective from 11 July 2011, the date the application was submitted. Importantly, the TCO does not affect the rights of any person, except the Commonwealth, as at the date of registration, nor does it impose any liabilities on any person in respect of actions taken before the registration date (s 269S). Instead, the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the effective date of the TCO (Reg 126(1)(r)).