EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1129408
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.
Link Force Engineering applied for a TCO in respect of certain tool belts on 30 August 2011.
Instrument
TCO No 1129408 was made on 22 November 2011. It declares that those certain tool belts 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. 1129408 is taken to have come into force on 30 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, addresses the need for a structured approach to granting tariff concessions on imported goods, aiming to promote fair trade and economic efficiency. Specifically, it enables the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to lower customs duty rates on certain goods, provided they meet the criteria set forth in the Act. This legislative framework was established to ensure that tariff concessions are granted judiciously, considering factors such as the absence of substitutable goods produced in Australia and the potential benefits to importers. The explanatory statement for Tariff Concession Instrument No. 1129408 highlights an application by Link Force Engineering for tariff concessions on certain tool belts, illustrating the Act's application in practice. The instrument, effective from 30 August 2011, aims to reduce the duty on these tool belts from the general rate of 5% to free, reflecting the policy objective of facilitating trade and supporting import activities.
Scope and Application
The Customs Act 1901, specifically through its Tariff Concession Orders (TCO) scheme, applies to individuals and entities seeking to import goods into Australia. This scheme allows for the application of a lower rate of customs duty on goods specified in a TCO. The scope of the Act is primarily concerned with the importation of goods, and it extends to any person who applies for a TCO. The Act's jurisdictional reach is Commonwealth, applying nationally across Australia. The application of the Act is subject to exclusions, particularly as outlined in section 269SJ which details goods that cannot be subject to a TCO. The application process involves the Chief Executive Officer of Customs determining whether an application meets the core criteria, which includes the condition that no substitutable goods are produced in Australia in the ordinary course of business. The TCO No. 1129408, made in respect of certain tool belts, exemplifies the application of this scheme, granting a concession that reduces the duty rate from 5% to free, effective from the date of the application. The Act extends its application through subordinate instruments, which can further define and specify the terms under which concessions are granted.
Key Provisions
The primary operative sections of this legislation pertain to the creation and application of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901 (section 269F). An applicant can apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. If the CEO determines that the application meets the core criteria, a TCO is issued, thereby granting a lower rate of customs duty on the specified goods (section 269C). The TCO must be made if the CEO is satisfied that no substitutable goods were produced in Australia on the day the application was lodged (section 269P(3)). For example, TCO No. 1129408, made on 22 November 2011, pertains to certain tool belts, declaring them to be subject to a zero rate of duty (section 269P(3)).
The obligations imposed on the parties governed by this Act are primarily on the CEO. Upon receiving a TCO application, the CEO must determine whether the application meets the core criteria and whether it is in respect of goods specified in section 269SJ, which cannot be subject to a TCO. If satisfied that the application meets the criteria, the CEO is mandated to make a written TCO order (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made, and this must occur as soon as practicable after accepting the application as valid (subsection 269K(1)). The CEO's duties also include ensuring that the TCO does not adversely affect the rights of any person other than the Commonwealth, nor impose liabilities on such persons in respect of actions taken before the TCO's registration date (subsection 269S(1)).
For breaches of the provisions under this Act, several offences and penalties may apply. However, the Explanatory Statement does not specify the exact offences or penalties for non-compliance. The Act generally provides for enforcement mechanisms that may include civil or criminal sanctions, although the specifics are not detailed in the provided text. The maximum penalties for breaches of the Customs Act 1901 can be severe, including substantial fines and imprisonment, depending on the nature and severity of the offence. It is important for parties governed by this Act to adhere to the prescribed processes and requirements to avoid potential legal repercussions.