EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1134133
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.
Hammersley Iron Pty Ltd applied for a TCO in respect of certain conductors on 07 October 2011.
Instrument
TCO No 1134133 was made on 04 January 2012. It declares that those certain conductors 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. 1134133 is taken to have come into force on 07 October 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, provides for the imposition of customs duties on imported goods, with certain exceptions under specific conditions. One such exception is provided through Tariff Concession Orders (TCOs) under Part XVA of the Act, which can be made by the Chief Executive Officer of Customs. The purpose of this legislative instrument is to address the issue of ensuring that imported goods receive appropriate tariff treatment, particularly when no suitable Australian-produced alternatives exist. This mechanism helps to promote fair competition and protect Australian industries from undue foreign competition. In the case of Tariff Concession Instrument No. 1134133, the instrument was introduced to provide a tariff concession for certain conductors, as applied by TCO No. 1134133, thereby granting a free rate of duty on these goods in lieu of the general rate of 5%. The policy objective is to facilitate the import of these specific goods by reducing the associated customs duty, thereby supporting the relevant industry and potentially lowering costs for businesses and consumers.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which apply a lower rate of customs duty to specified goods. This process is available to any person who applies under section 269F, provided the goods in question are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. The application must meet core criteria, notably that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269C, 269D, and 269E. If the CEO determines that the application is valid, a TCO is issued under section 269P, which specifies the applicable tariff item from Schedule 4 of the Customs Tariff Act 1995. For instance, Tariff Concession Order No. 1134133, made on 4 January 2012, granted a zero duty rate on certain conductors, previously subject to a 5% duty, following a successful application by Hammersley Iron Pty Ltd. The TCO’s application is retrospective to the date of the application submission, in this case, 7 October 2011, and does not affect existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of this legislation are section 269F, which allows an application to be made to the CEO for a Tariff Concession Order (TCO); section 269C, which sets out the core criteria that a TCO application must meet; and section 269P(3), which requires the CEO to make a TCO if the application meets these criteria. The Explanatory Statement also references section 269SJ, which specifies the goods that cannot be subject to a TCO, and section 269K(1), which mandates the publication of a notice in the Gazette inviting submissions on a TCO application.
This Act imposes several obligations on the parties involved. Firstly, it mandates that any person wishing to apply for a TCO must ensure their application meets the core criteria outlined in section 269C. This includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. Secondly, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to submit any objections to the TCO. If no submissions are received, the CEO must proceed with making the TCO. Lastly, the Act stipulates that the TCO will be deemed to have come into force on the date the application was lodged, although the actual TCO is only made on the date it is registered.
There are no explicit offences, penalties, or civil/criminal consequences mentioned in the text for the breach of this legislation. However, the failure to adhere to the specified criteria for a TCO application could result in the CEO declining to make the TCO, thus leaving the applicant without the tariff concession they sought. Additionally, the process of publishing a notice in the Gazette and inviting submissions is a procedural requirement that must be followed to ensure the legitimacy and transparency of the TCO process.