EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1134471
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.
Alcoa of Australia Ltd applied for a TCO in respect of certain presses on 13 October 2011.
Instrument
TCO No 1134471 was made on 04 January 2012. It declares that those certain presses 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. 1134471 is taken to have come into force on 13 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 was amended by the introduction of Tariff Concession Order No. 1134471, which was enacted in 2012. This legislation was introduced to address the need for concessionary customs duty rates for specific imported goods under certain conditions, facilitating trade and economic efficiency. The instrument was enacted by the Parliament of Australia and aims to provide relief to importers by lowering the customs duty on specified goods, in this case certain presses, where it is confirmed that no substitutable goods are produced domestically. This mechanism is intended to support industries by reducing the cost of essential imported equipment, thereby fostering competitiveness without imposing any new liabilities on affected parties.
The process involves the Chief Executive Officer of Customs evaluating applications for tariff concessions, ensuring that they meet the criteria outlined in the Customs Act. If the application is deemed valid and no substitutable goods are produced in Australia, a Tariff Concession Order is issued, providing the specified goods with a reduced or free duty rate. This approach not only aids businesses in reducing their operational costs but also aligns with broader policy objectives of promoting fair trade practices and supporting industrial development.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity that seeks to apply for a TCO for goods not specified in section 269SJ, which outlines goods ineligible for tariff concessions. The Act ensures that if the CEO determines that no substitutable goods are produced in Australia and that the application meets the core criteria, a TCO will be issued, resulting in a lower rate of customs duty for the specified goods. The geographic reach of this legislation is national, as it applies across all states and territories within Australia. The Act does not specify any exclusions or exemptions other than those outlined in section 269SJ, and it does not set any thresholds for applications. The application of the Act can be extended or restricted through subordinate instruments, as evidenced by the creation of TCO No. 1134471 for certain presses, which was made effective from the date the application was lodged. This particular TCO resulted in a duty-free status for the specified goods, thereby benefiting the importers.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1134471, under the Customs Act 1901, include sections 269C, 269P, and 269SJ (paragraphs 1 to 3). Section 269C specifies the criteria for a Tariff Concession Order (TCO), which includes ensuring that no substitutable goods are produced in Australia. If the application meets these criteria, the CEO must make a written order, as outlined in section 269P (paragraph 3). Section 269SJ lists the goods that cannot be subject to a TCO (paragraph 4). The TCO, once made, provides for a lower rate of customs duty, or in this case, a free rate for the specified goods, as detailed in Schedule 4 of the Customs Tariff Act 1995 (paragraph 5).
The obligations and requirements imposed by the Act on the parties or entities it governs include the necessity for applicants to ensure their goods meet the core criteria stipulated in section 269C. This involves demonstrating that no substitutable goods are being produced in Australia, which is defined in section 269D. Furthermore, the CEO has a duty to publish a notice in the Gazette under section 269K (paragraph 6) inviting submissions from interested parties, although this step is more procedural and did not yield any submissions for this TCO. The CEO's role also includes verifying that the goods do not fall under the prohibitions listed in section 269SJ before making the TCO (paragraph 7).
In terms of consequences for breach, the Customs Act 1901 does not explicitly detail offences or penalties in relation to the making of TCOs. However, any non-compliance with the conditions of the TCO, such as misapplying the concession, could lead to civil or criminal consequences under the broader customs laws. This includes potential fines or imprisonment for breaches related to customs duty evasion, as stipulated in other sections of the Customs Act. The specific penalties would depend on the nature and severity of the breach (paragraph 8).