EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1135770
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.
Welding Industries of Australia applied for a TCO in respect of certain ac and dc welding generators on 13 October 2011.
Instrument
TCO No 1135770 was made on 12 January 2012. It declares that those certain ac and dc welding generators 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. 1135770 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 Tariff Concession Instrument No. 1135770, enacted in 2012, addresses a specific gap within the Customs Act 1901 by providing for tariff concessions on certain goods, in this case, certain ac and dc welding generators. The Act, as amended, allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce customs duty rates for goods not produced in Australia and for which no suitable substitute is available domestically. The Tariff Concession Instrument No. 1135770 was made under section 269F of the Customs Act 1901, which outlines the process for applying for a TCO. The policy objective is to facilitate the importation of goods that are not produced in Australia, thereby potentially lowering costs for businesses and consumers while encouraging competition and market efficiency. The instrument came into force on 13 October 2011, the date the application was lodged, and ensures that the rights of importers are protected without imposing any liabilities on them.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). This Act applies to individuals or entities seeking tariff concessions on specific goods imported into Australia. The application process involves the applicant meeting core criteria, including the absence of substitutable goods produced in Australia on the day the application is lodged. Once the CEO is satisfied that the application meets these criteria, a TCO is issued, granting the applicant a lower rate of customs duty on the specified goods. Notably, the Act explicitly excludes certain goods from being subject to a TCO as per section 269SJ. The geographic scope of this legislation is national, affecting all imports across Australia, and its application is further detailed and potentially expanded through subordinate instruments such as regulations and orders. The issuance and effect of TCOs, including their commencement date aligning with the date of application, are governed by provisions within the Act and related regulations, ensuring clarity and fairness in the application process.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1135770 pertain to the establishment and effect of Tariff Concession Orders (TCOs) under the Customs Act 1901 (sections 269C, 269P, and 269S). Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order, specifying the goods and the applicable item from Schedule 4 of the Customs Tariff Act 1995. This written order, or TCO, declares that the goods in question are to be subject to a prescribed rate of duty, which in this case is free of charge.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must determine whether the TCO application meets the core criteria as outlined in section 269C. This involves verifying that no substitutable goods were produced in Australia and that the goods in question are not specified in section 269SJ, which lists goods ineligible for a TCO. The CEO is also required to publish a notice in the Gazette (subsection 269K(1)) as soon as practicable after accepting the application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission.
Failure to comply with the provisions of the Customs Act 1901 in relation to TCOs can result in various offences and penalties. Although the specific penalties are not detailed in the explanatory statement, it is clear that breaches of the Act may lead to civil or criminal consequences. These could include fines, imprisonment, or other penalties as prescribed by the Act or related legislation. The exact nature and extent of these penalties would depend on the specific breach and the discretion of the relevant authorities.