EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1123858
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.
Light Mounting Systems Australia applied for a TCO in respect of certain cable hoists on 19 July 2011.
Instrument
TCO No 1123858 was made on 05 October 2011. It declares that those certain cable hoists 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. 1123858 is taken to have come into force on 19 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 by the Australian Parliament to provide a comprehensive framework for the regulation of customs and excise. The introduction of Tariff Concession Orders (TCOs) under Part XVA of the Act addresses a gap in the customs duty regime by allowing for the application of lower rates of customs duty on specified goods, provided that certain criteria are met. This mechanism aims to support industries by reducing the cost of imported goods that do not have domestic substitutes. The objective is to facilitate fair competition and potentially encourage the growth of local industries by making imported goods more competitively priced. The Tariff Concession Instrument No. 1123858, made by the Chief Executive Officer of Customs, exemplifies this process by granting a tariff concession on certain cable hoists, reducing their duty rate from 5% to free, effective from the date of application. This particular concession was granted following an application by Light Mounting Systems Australia, and no objections were raised during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 1123858 applies to specific goods identified in the application submitted to the Chief Executive Officer of Customs (CEO) under Part XVA of the Customs Act 1901. This particular instrument relates to certain cable hoists applied for by Light Mounting Systems Australia, which are subject to a concession in customs duty. The instrument is designed to benefit importers by granting a lower rate of duty, in this case, free, provided that the CEO determines no substitutable goods are produced in Australia in the ordinary course of business, and the application meets the core criteria set out in the Act. The geographic reach of this legislation is national, impacting all entities involved in the importation of the specified goods within Australia.
The application of this Act does not extend to goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a Tariff Concession Order (TCO). The instrument takes effect from the date the application for the TCO was lodged, in this case, 19 July 2011. Importantly, the TCO does not affect the rights of any person, other than the Commonwealth, in a way that would disadvantage them or impose new liabilities for actions taken before the instrument's registration. The instrument's application can be further refined through subordinate instruments as necessary to address specific cases or amendments.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 1123858 are sections 269C, 269B, 269D, 269E, 269F, 269K, 269P, 269S, and 269SJ of the Customs Act 1901. These sections provide the framework for applying for a Tariff Concession Order (TCO) and the criteria that the Chief Executive Officer (CEO) of Customs must consider in making a decision. Section 269F allows a person to apply for a TCO in respect of goods, and section 269C requires the CEO to consider whether the application meets the core criteria, specifically if no substitutable goods were produced in Australia at the time of the application. Sections 269B, 269D, and 269E define key terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods". If the CEO is satisfied that the application meets these criteria, they must make a TCO as outlined in section 269P(3). Section 269K mandates that the CEO publish a notice in the Gazette inviting submissions on the application, while section 269S specifies the effective date of the TCO, which is the date the application was lodged.
The Act imposes several obligations on parties involved in the process of applying for and receiving a TCO. The CEO is required to assess applications to ensure they meet the core criteria specified in the Act, particularly focusing on whether substitutable goods were produced in Australia. If the CEO determines that the application meets these criteria, they must make a TCO and publish a notice in the Gazette, inviting any interested parties to submit their views on the application. Importers of goods subject to a TCO are entitled to apply for a refund of duty on those goods under certain regulations. The CEO's decision-making process must be transparent and inclusive, allowing for public input on the proposed concession.
Under the Customs Act 1901, breaches of the conditions set out for TCOs could lead to various penalties or consequences. However, the specific text provided does not detail any offences, penalties, or civil/criminal consequences related to breaches of the TCO. The focus of the Act appears to be more on the procedural aspects of applying for and granting TCOs, rather than on the punitive measures for non-compliance with the Act's provisions. The absence of explicit penalties in the provided text suggests that the primary concern is ensuring the correct application of tariff concessions rather than enforcing penalties for non-compliance.