EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1136709
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.
CMC Australia applied for a TCO in respect of certain tubes on 03 November 2011.
Instrument
TCO No 1136709 was made on 23 January 2012. It declares that those certain tubes 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. 1136709 is taken to have come into force on 03 November 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 Australian Parliament to regulate the import and export of goods, including the imposition and collection of customs duties. The Act was introduced to address the need for a structured and consistent approach to managing the flow of goods across Australia’s borders. The Tariff Concession Instrument No. 1136709, which was made under the Act, aims to provide relief from customs duties on specific goods to promote trade and economic efficiency. This instrument, enacted in 2012, applies to certain tubes for which CMC Australia applied for a tariff concession on 3 November 2011. The concession was granted by the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia, thereby meeting the core criteria under the Act. The policy objective of this instrument is to facilitate the import of these specific goods without the burden of customs duty, thus supporting the broader economic interest of ensuring competitive pricing and accessibility of these goods in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 1136709, made under the Customs Act 1901, applies specifically to certain tubes as declared by the Chief Executive Officer of Customs. This instrument aims to provide a concession in customs duty for these goods, contingent upon the absence of substitutable goods being produced in Australia. The legislation operates within the scope of the Customs Act, specifically under Part XVA which governs the making of Tariff Concession Orders (TCOs). The application of this Act is triggered by an application to the CEO for a TCO, with the process necessitating a determination of whether the application meets the core criteria outlined in the Act. The geographic reach of this legislation is national, as it pertains to the Commonwealth's customs duties and the associated tariff concessions. Notably, this TCO does not disadvantage any person other than the Commonwealth nor impose any liabilities on such persons in respect of actions prior to the order's registration. Additionally, it does not affect the rights of any person except to beneficially affect the rights of importers who may apply for a refund of duty on goods imported since the date the TCO is deemed to have come into force. The application of this Act may be extended or further defined through subordinate instruments, although the primary focus remains on the concession of customs duty for the specified goods.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1136709 (Sections 269C, 269F, and 269P(3) of the Customs Act 1901) require that the Chief Executive Officer of Customs (CEO) determine whether a Tariff Concession Order (TCO) can be made for certain goods. Under section 269F, an application for a TCO can be made by any person to the CEO. If the CEO is satisfied that the application is valid and meets the core criteria specified in section 269C, the CEO must make a written order (a TCO) declaring that the goods are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This instrument, TCO No. 1136709, specifies that certain tubes are subject to a free rate of duty, as no substitutable goods were produced in Australia on the day the application was lodged.
The Act imposes obligations on both the CEO and the applicant for a TCO. The CEO must first ensure that the application is valid and does not pertain to goods specified in section 269SJ, which cannot be subject to a TCO. The CEO then evaluates whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day of application. If these criteria are met, the CEO is required to publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made. After considering any submissions, if none are received, the CEO must proceed to make the TCO.
The Customs Act 1901 and the accompanying regulations outline the consequences for non-compliance with the provisions of a TCO. Although the explanatory statement does not explicitly state any penalties for breach, the general legal framework suggests that failure to comply with the terms of a TCO could result in civil or criminal penalties. These may include fines or imprisonment, depending on the severity of the breach. The exact penalties would be determined according to the relevant provisions of the Customs Act 1901 and other applicable laws. It is also important to note that the TCO does not affect the rights of a person as at the date of registration so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration.