EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1127273
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.
Taghleef Industries applied for a TCO in respect of certain chain track systems on 12 August 2011.
Instrument
TCO No 1127273 was made on 07 November 2011. It declares that those certain chain track system 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. 1127273 is taken to have come into force on 12 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 was enacted to provide for the regulation of customs and excise duties, among other things. The Tariff Concession Instrument No. 1127273, made in 2011, addresses the problem of providing tariff concessions for certain goods that are not produced in Australia in the ordinary course of business. This instrument was introduced to ensure that Australian consumers and businesses have access to competitively priced imported goods, while also providing a safeguard for local industries that may be unable to produce certain goods domestically. The instrument was created by the Chief Executive Officer of Customs under the authority granted by section 269F of the Customs Act 1901. The policy objective of this instrument is to promote fair and efficient trade practices by providing tariff relief for specific imported goods, thereby benefiting importers and consumers without disadvantaging existing local industries.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which reduce the customs duty on specified goods. This Act applies to individuals or entities seeking tariff concessions for imported goods, provided the goods are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The scope of the Act extends to any person or entity that imports goods into Australia and seeks to benefit from reduced customs duties under a TCO. Geographically, the Act's application is national, impacting all territories within Australia. The Act also allows for the extension or restriction of its application through subordinate instruments, although specific details of such extensions or restrictions are not elaborated upon in the explanatory statement. There are no reported exclusions, exemptions, or thresholds detailed in the explanatory statement, but the process for applying and the criteria for approval are clearly outlined.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1127273 under the Customs Act 1901 (section 269F) establish the framework for applying and granting Tariff Concession Orders (TCO). A TCO can be applied for by any person regarding specific goods, provided these goods are not those listed in section 269SJ which are ineligible for such concessions. For a TCO to be granted, the application must meet the core criteria as outlined in section 269C, which requires that on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The meaning of terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are further defined in sections 269D, 269E, and 269B respectively. If the Chief Executive Officer of Customs is satisfied that the application meets these criteria, they must issue a written TCO as specified in section 269P(3), declaring the goods subject to a specified item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. An applicant must ensure their TCO application complies with the core criteria set out in section 269C. The Chief Executive Officer of Customs has the responsibility to assess applications against these criteria and make a decision based on whether the application meets the necessary conditions. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as per subsection 269K(1). In this case, no submissions were received in response to the notice, indicating that the application met the required standards without opposition.
In terms of breaches and penalties, the Customs Act 1901 does not explicitly state penalties for non-compliance with the TCO provisions. However, any breaches of customs regulations generally could result in civil or criminal consequences. Civil penalties can include fines, while criminal penalties might include imprisonment, reflecting the severity of the breach. The exact penalties depend on the specific nature of the breach and the discretion of the court. The TCO itself does not impose any liabilities on individuals or entities, except for the Commonwealth, ensuring that rights and liabilities are protected as per paragraph 126(1)(r) of the Regulations.
Section 269S(1) stipulates that a TCO is considered to have come into force on the day the application for the TCO was lodged, in this instance, 12 August 2011. This commencement date ensures that the rights of importers are protected and they can benefit from the concession, including applying for a refund of duty on goods imported since the effective date of the TCO. The rights of any person other than the Commonwealth are not adversely affected by the registration of the TCO, ensuring that there are no retroactive liabilities imposed on anyone.