EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1132658
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.
Orica Australia applied for a TCO in respect of certain boosters on 23 September 2011.
Instrument
TCO No 1132658 was made on 19 December 2011. It declares that those certain boosters 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. 1132658 is taken to have come into force on 23 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 was enacted by the Parliament of Australia and it establishes a framework for administering customs duties and tariff concessions. The Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce customs duties on certain goods. The 2012 Tariff Concession Instrument No. 1132658 applies this mechanism to certain boosters, reducing their customs duty from 5% to free, effective from the date of application on 23 September 2011. The Tariff Concession Instrument was introduced to address the need for tariff concessions on goods that do not have Australian-made equivalents, thereby supporting Australian industries by making certain imported goods more competitive. This legislative instrument aims to encourage the import of goods that are not produced in Australia, thus benefiting importers by potentially lowering their costs and enhancing market access for these products.
Scope and Application
The Customs Act 1901, under Part XVA, provides a mechanism for the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs) that lower the rate of customs duty on specified goods. This legislation applies to any person or entity that imports goods into Australia and seeks a reduction in customs duty by applying for a TCO. The scope of the Act is national, as it falls under the Commonwealth jurisdiction. The Act excludes certain goods specified in section 269SJ from being subject to a TCO. The process involves an application by the importer to the CEO, who must then determine whether the application meets the core criteria, which include the absence of substitutable goods being produced in Australia in the ordinary course of business. If the application meets these criteria, the CEO issues a written TCO, which specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods in question. The TCO does not affect any existing rights or impose liabilities on persons other than the Commonwealth, but it does provide benefits to importers who can apply for a refund of duty on goods imported since the TCO came into force.
Key Provisions
The main operative sections of this legislation are section 269F, which allows for the application of Tariff Concession Orders (TCOs), and section 269P, which mandates the Chief Executive Officer (CEO) of Customs to make a written order if certain criteria are met. Specifically, section 269F allows a person to apply for a TCO in respect of goods, provided those goods are not specified in section 269SJ, which outlines goods that cannot be subject to a TCO. If the application meets the core criteria, as outlined in section 269C, the CEO must issue a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This declaration effectively reduces the customs duty on these goods to zero. Section 269P(3) further specifies the conditions under which the CEO must make a TCO.
The obligations imposed by this legislation primarily concern the CEO of Customs. The CEO must ensure that any TCO application is valid and meets the criteria outlined in section 269C. This includes verifying that no substitutable goods were produced in Australia on the day the application was lodged. The CEO must also publish a notice in the Gazette, inviting any interested parties to lodge submissions against the application, as required by section 269K(1). Additionally, the CEO must issue a TCO if the application meets the specified criteria.
There are no explicit offences or penalties outlined in this particular legislation for breach of the TCO provisions. However, failure to comply with the conditions set out in the Act could lead to legal consequences under other sections of the Customs Act 1901 or related legislation. The TCO itself provides a specific tariff benefit to eligible goods, but it does not impose any liabilities on individuals or entities for actions taken before the TCO's effective date. This is clarified in subsection 269S(1), which states that the TCO does not affect pre-existing rights or impose liabilities for past actions.