EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1126017
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.
Bridge and Company applied for a TCO in respect of certain chains on 03 August 2011.
Instrument
TCO No 1126017 was made on 28 October 2011. It declares that those certain chains 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. 1126017 is taken to have come into force on 03 August 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, establishes a framework for the administration of customs and excise duties in Australia. The Act was introduced to address the need for a comprehensive regulatory system governing the importation and exportation of goods, and the collection of duties associated with these activities. One specific provision of the Act, Part XVA, allows for the creation of Tariff Concession Orders (TCOs) which reduce the customs duty on certain goods, provided that no substitutable goods are produced in Australia. This measure was designed to support industries by lowering costs and making imported goods more competitive.
The Tariff Concession Instrument No. 1126017, issued under the Customs Act 1901, aims to provide tariff concessions for specific chains by the Chief Executive Officer of Customs. This instrument was introduced following an application by Bridge and Company on 3 August 2011. The instrument was made effective from the same date, with no submissions received against the concession. The policy objective is to ensure that the rights of importers are beneficially affected, allowing them to apply for duty refunds for goods imported since the effective date of the concession, without imposing any liabilities.
Scope and Application
The Tariff Concession Instrument No. 1126017 under the Customs Act 1901 applies specifically to certain chains that are subject to a Tariff Concession Order (TCO). The Act facilitates the granting of TCOs by the Chief Executive Officer of Customs (CEO) to allow for a lower rate of customs duty on specified goods, provided the application for the concession meets the core criteria as outlined in the Act. The application process involves assessing whether no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. The TCO applies nationally and is effective from the date the application was lodged, which in this instance is 03 August 2011. The CEO's decision to grant the TCO was made after ensuring there were no submissions against the concession, indicating public acceptance of the tariff reduction for the specified goods. Importantly, the TCO does not retroactively affect the rights of any person or impose new liabilities, ensuring that only future transactions involving these goods benefit from the tariff concession.
Key Provisions
Section 269F of the Customs Act 1901 provides the mechanism by which an individual or entity can apply for a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs (CEO). This section outlines the process by which applications are to be made and the criteria that the CEO must consider. Once an application is deemed valid and not in respect of goods specified in section 269SJ of the Act, the CEO must then determine if the application meets the core criteria as set out in section 269C. This involves ensuring that no substitutable goods were produced in Australia on the day the application was lodged, with definitions provided by sections 269D, 269E, and 269F. If these criteria are satisfied, the CEO is required to issue a written TCO under subsection 269P(3), specifying the applicable customs duty rate.
The obligations imposed on the parties by the Customs Act 1901 include the requirement for applicants to provide sufficient information to establish that the application meets the core criteria. The CEO has the responsibility to review applications, publish notices in the Gazette to invite submissions from interested parties, and ensure that any TCO made does not disadvantage any person or impose liabilities on them in relation to actions taken prior to the TCO’s effective date. Furthermore, under section 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting an application as valid, allowing for public submissions regarding the proposed TCO.
In terms of consequences, the Customs Act 1901 does not specify criminal penalties for breaches related to TCOs. However, failure to comply with the requirements or misuse of a TCO could result in civil penalties. For instance, if an entity incorrectly claims a tariff concession, they may be subject to financial penalties or required to repay any duties avoided. The Act ensures that the TCO does not affect the rights of any person adversely and does not impose any liabilities on persons other than the Commonwealth, as per subsection 269S(1). The specific financial implications or penalties are not detailed in the Act itself but would be governed by other relevant legislation or administrative guidelines.