EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1130481
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.
Beaver Engineering Pty Ltd applied for a TCO in respect of certain fences on 07 September 2011.
Instrument
TCO No 1130481 was made on 28 November 2011. It declares that those certain fences 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. 1130481 is taken to have come into force on 07 September 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, provides a framework for the administration of customs and excise duties, and the regulation of the importation and exportation of goods. The introduction of Part XVA of the Act, including provisions for Tariff Concession Orders (TCOs), was intended to address the need for a more flexible and responsive approach to the imposition of customs duties. This was designed to ensure that Australian industries could remain competitive without being unduly burdened by tariff barriers, particularly in cases where no domestic alternatives exist. The policy objective behind this mechanism is to support Australian industries by reducing the cost of imported goods that are not produced locally, thereby encouraging efficiency and competitiveness. Under this framework, the Chief Executive Officer of Customs can grant tariff concessions for specific goods if it is determined that no substitutable goods are produced in Australia, thus offering relief to businesses and consumers alike.
Scope and Application
The Tariff Concession Instrument No. 1130481 under the Customs Act 1901 applies to goods that are the subject of a Tariff Concession Order (TCO). The Act allows for the application of a lower rate of customs duty to goods specified in a TCO, provided the application meets the core criteria as outlined in section 269C of the Act, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The TCO in question, which came into effect on 7 September 2011, pertains to certain fences and specifies that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free, as opposed to the general rate of 5%. The application of this TCO is restricted to the goods specified and does not impose any liabilities on any person, while potentially benefiting importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date. The application of this legislation is managed by the Chief Executive Officer of Customs, who is responsible for making written orders and publishing notices in the Gazette, inviting submissions from interested parties.
Key Provisions
The Customs Act 1901 (the Act) allows for the creation of Tariff Concession Orders (TCOs) under Part XVA, which provide for lower rates of customs duty on certain goods. When an application is made under section 269F, the Chief Executive Officer of Customs (the CEO) must determine if the application meets the core criteria as outlined in section 269C, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business (section 269D and section 269E). If the application meets these criteria, a TCO is issued under section 269P(3), specifying that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the CEO and applicants include the requirement for the CEO to consider the application and assess it against the core criteria. The CEO must also publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to submit objections if they believe the TCO should not be issued. In this instance, no submissions were received, leading to the issuance of TCO No. 1130481. The TCO does not retroactively affect the rights of any person except the Commonwealth and does not impose any liabilities on any person for actions taken prior to the TCO's issuance.
Under the Act, there are no specified offences or penalties directly related to the issuance or application of TCOs. However, if an entity breaches any related customs laws, they could face penalties under the Customs Act or other relevant legislation. For example, knowingly making a false statement in an application could lead to penalties under section 230 of the Customs Act, which may include fines or imprisonment. The specific penalties for such breaches are not detailed in the TCO itself but would be determined according to the relevant sections of the Customs Act or other applicable legislation.