EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1127458
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.
Gunnersen applied for a TCO in respect of certain pegboard on 15 August 2011.
Instrument
TCO No 1127458 was made on 10 November 2011. It declares that those certain pegboard 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. 1127458 is taken to have come into force on 15 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 Australian Parliament, establishes a framework for the imposition of customs duty on imported goods. To address the need for tariff concessions on specific goods, the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This process aims to reduce customs duty for certain imported goods under specific conditions, thereby providing economic benefits to businesses and consumers. The policy objective behind these concessions is to ensure that no substitutable goods are produced domestically when a TCO is applied for, thereby fostering fair competition and supporting industries that rely on imported materials. The explanatory statement for Tariff Concession Instrument No. 1127458, for example, details how the CEO granted a TCO for certain pegboard, reducing the duty rate from 5% to free, effective from the date of application on 15 August 2011.
Scope and Application
The Tariff Concession Instrument No. 1127458 under the Customs Act 1901 applies to specific goods identified in an application for tariff concession, with the scope limited to those goods that meet the core criteria stipulated in the Act. The instrument pertains to the application submitted by Gunnersen for certain pegboard on 15 August 2011, and it becomes effective from the date of application lodging. The Act applies to any person who can apply for tariff concessions provided that the goods in question are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a tariff concession order. The geographic reach of this legislation is national, applying across Australia as it is an instrument of the Commonwealth. Exclusions are explicitly defined, and the Act does not disadvantage any person other than the Commonwealth by imposing liabilities or affecting rights as at the date of registration. Subordinate instruments can extend or restrict the application of the Act by further detailing the conditions and criteria for tariff concessions.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1127458 are sections 269C, 269B, 269D, 269E, and 269P of the Customs Act 1901. These sections outline the conditions and processes for applying for a Tariff Concession Order (TCO). Section 269C mandates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. This determination hinges on definitions provided in sections 269B, 269D, and 269E, which clarify terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods". If the Chief Executive Officer (CEO) of Customs is satisfied that these criteria are met, section 269P(3) requires the CEO to issue a written TCO, specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. Applicants for a TCO must ensure that their application is made in accordance with section 269F, and the CEO must carefully assess the application against the core criteria specified in section 269C. The CEO is also required to publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any person who believes the TCO should not be made to lodge a submission, as outlined in subsection 269K(1). Failure to follow these procedures could result in the TCO not being issued or being challenged in court.
In terms of consequences for breach, the Customs Act 1901 does not explicitly state civil or criminal penalties for non-compliance with the TCO provisions. However, any failure to adhere to the stipulated processes or fraudulent applications could potentially lead to legal challenges or administrative penalties. The Act ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO, and it does not impose any liabilities on any person in respect of actions taken before the date of registration. Importers can apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations.