EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1129585
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.
Aluminium Shapemakers Pty Ltd applied for a TCO in respect of certain assemblies on 31 August 2011.
Instrument
TCO No 1129585 was made on 21 November 2011. It declares that those certain assemblies 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. 1129585 is taken to have come into force on 31 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 flexible mechanism to adjust customs duties on specific goods through Tariff Concession Orders (TCOs). The Act allows the Chief Executive Officer of Customs to apply lower rates of customs duty to goods specified in a TCO. This process ensures that the Australian market is not burdened by excessive tariffs on goods for which there are no domestic alternatives. The policy objective is to facilitate trade and encourage the efficient use of resources by reducing the cost of importing certain goods. The explanatory statement for Tariff Concession Instrument No. 1129585, issued on 21 November 2011, highlights that Aluminium Shapemakers Pty Ltd successfully applied for a TCO on certain assemblies, resulting in a reduction of the duty rate from 5% to free. This change took effect from 31 August 2011, the date the application was lodged, and no objections were raised during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 1129585 under the Customs Act 1901 applies to goods that are subject to a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs (CEO) when certain criteria are met. Specifically, the Act applies to entities or individuals who apply for a TCO in respect of goods, provided that the goods are not specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. The Act applies to situations where no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged, as defined by sections 269D, 269E, and 269F of the Act. The geographic reach of this legislation is national, operating under the Commonwealth of Australia, and it extends its application to international trade by setting tariff rates for imported goods. There are no exclusions or exemptions specified in the Act itself, but the CEO has the discretion to decide on the validity of TCO applications based on the criteria outlined. The application of the Act can be extended or restricted through subordinate instruments such as regulations and orders made by the CEO.
Key Provisions
The main operative sections of this legislation, specifically the Customs Act 1901 and its related schedule, allow for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F allows a person to apply for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, they must make a written order declaring the goods are subject to a TCO. The TCO in this case, Tariff Concession Instrument No. 1129585, was made on 21 November 2011 and it specifies that certain assemblies are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, thereby making the duty rate free.
The Act imposes several obligations on the parties involved. The CEO must consider applications for TCOs and determine whether they meet the core criteria (sections 269C and 269F). This includes ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Once a TCO is made, it must be published in the Gazette with an invitation for submissions from interested parties (subsection 269K(1)). The CEO must also ensure that the TCO does not affect the rights of any person adversely as at the date of registration (subsection 269S(1)).
Section 269K(1) of the Customs Act 1901 requires the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice must include an invitation for any person who believes the TCO should not be made to lodge a submission with the CEO. In this case, the CEO did not receive any submissions in response to the notice. The TCO, once made, is taken to have come into force on the day the application was lodged (subsection 269S(1)).
The Customs Act 1901 does not explicitly detail specific offences, penalties, or consequences for breach of the TCO provisions. However, failure to comply with the core criteria or procedural requirements could potentially lead to the TCO being challenged or overturned. Additionally, under the Customs Act 1901, penalties for false statements or misleading information in applications can apply, although the specifics are not detailed in the explanatory statement. Importers may also apply for a refund of duty on goods imported since the TCO came into force, as outlined in paragraph 126(1)(r) of the Regulations.