EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1126861
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.
Powerplants Australia applied for a TCO in respect of certain trays on 09 August 2011.
Instrument
TCO No 1126861 was made on 10 November 2011. It declares that those certain trays 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. 1126861 is taken to have come into force on 09 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 Parliament of Australia, facilitates the implementation of Tariff Concession Orders (TCOs) under Part XVA, allowing for reduced customs duty on specified goods. This legislative framework was designed to address the need for economic incentives and competitiveness in the Australian market by enabling the Chief Executive Officer of Customs to grant tariff concessions on goods not produced in Australia. The objective is to ensure that Australian consumers and businesses have access to goods at lower costs, thereby supporting economic growth and market efficiency. The Tariff Concession Instrument No. 1126861, made under this Act, exemplifies the process by which specific goods, such as certain trays, can receive tariff concessions if no substitutable Australian-made goods exist, effectively benefiting importers and the broader economy.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation allows for the application of a lower rate of customs duty on goods that are the subject of a TCO. The Act applies to any person or entity that seeks to import goods into Australia, provided that the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The Act’s application is national in scope, encompassing the entire Commonwealth of Australia. A TCO application must meet the core criteria, including the absence of substitutable goods produced in Australia, as defined by section 269D and 269E of the Act. If these criteria are satisfied, the CEO is mandated to make a TCO, as illustrated by TCO No. 1126861 concerning certain trays, which was declared under the Act on 10 November 2011. The Act also stipulates that any person may object to a TCO application, although no objections were received in this instance. The TCO’s commencement is retroactive to the date of the application, which in this case was 9 August 2011, ensuring that the rights of importers are positively affected from that date.
Key Provisions
The primary sections of the Customs Act 1901, specifically under Part XVA, establish the framework for Tariff Concession Orders (TCOs) (ss 269C, 269F, 269P(3)). An applicant may submit an application for a TCO to the Chief Executive Officer of Customs (CEO) under section 269F. For the application to be considered, it must not pertain to goods that are specified in section 269SJ, which lists goods that cannot be subject to a TCO. Once an application is received, the CEO must assess whether it meets the core criteria outlined in section 269C, which includes the requirement that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). If the application meets these criteria, the CEO must then issue a written order in the form of a TCO (s 269P(3)).
The Act imposes several obligations on the parties involved. Firstly, an applicant must ensure that their TCO application is not in respect of goods specified in section 269SJ of the Act. Secondly, the CEO is obligated to assess the application against the core criteria, including verifying the absence of substitutable goods produced in Australia in the ordinary course of business on the application date. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (s 269K(1)). In this case, no submissions were received.
The Act also delineates the consequences for non-compliance. While the explanatory statement does not explicitly detail specific offences, penalties, or civil/criminal consequences for breach, it is implicit that any failure to adhere to the requirements and conditions set forth in the Act and the TCO could result in legal ramifications. The Act’s provisions regarding TCOs are designed to ensure that only eligible goods receive tariff concessions, and any misuse or improper application could potentially lead to the nullification of the TCO or other legal actions. The absence of substitutable goods produced in Australia in the ordinary course of business is a critical criterion, and any misrepresentation or breach of this condition could attract scrutiny or penalties under the Customs Act 1901.