EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1137039
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.
Chain Systems Pty Ltd applied for a TCO in respect of certain slopes or slides on 07 November 2011.
Instrument
TCO No 1137039 was made on 01 February 2012. It declares that those certain slopes or slides 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. 1137039 is taken to have come into force on 07 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, enacted by the Australian Parliament, establishes a framework for imposing customs duties on imported goods, among other regulatory provisions. To address the need for tariff concessions that can lower the duty on specific goods, the Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) under section 269F. The primary objective of TCOs is to provide relief by applying a lower rate of customs duty to goods that are not produced domestically or are not substitutable by locally produced goods, as defined by sections 269D and 269E. The Tariff Concession Instrument No. 1137039, which came into force on 7 November 2011, was created in response to an application by Chain Systems Pty Ltd for tariff concessions on certain slopes or slides. The instrument exempts these goods from the general 5% duty rate, setting it to free, effective from the date the application was lodged. This legislative measure aims to benefit importers by potentially allowing them to claim refunds for duties paid on such goods since the effective date of the concession.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking tariff concessions for goods, particularly those who wish to import specific items with reduced or waived customs duties. The Act specifically governs the process under which Tariff Concession Orders (TCOs) can be applied for and granted by the Chief Executive Officer of Customs, allowing for a lower rate of customs duty for goods specified in such orders. The Act operates across the Commonwealth of Australia, providing a uniform framework for the application and approval of tariff concessions. Notably, the Act excludes certain goods from being eligible for a TCO, as specified in section 269SJ. Furthermore, the Act allows for the creation of subordinate instruments that can extend or modify its application, although the primary focus remains on ensuring that TCOs are granted only when no substitutable goods are produced in Australia in the ordinary course of business. This legislative framework ensures that the application of tariff concessions is both transparent and fair, benefiting importers while maintaining economic integrity.
Key Provisions
The Tariff Concession Instrument No. 1137039, under the Customs Act 1901, pertains specifically to Tariff Concession Orders (TCOs). A TCO is an order that applies a lower rate of customs duty to certain goods, as outlined in Section 269F. Applications for TCOs can be made by any person to the Chief Executive Officer (CEO) of Customs, provided that the goods in question are not those listed in Section 269SJ, which are ineligible for tariff concessions. The CEO must then determine whether the application meets the core criteria specified in Section 269C, which requires that on the day the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business.
The obligations under this legislation require applicants to ensure their goods are eligible for a TCO, meaning they must demonstrate that no equivalent products are being manufactured domestically. The CEO, on receiving an application, must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the concession. This process ensures transparency and allows for stakeholder input before a decision is made. Once the CEO is satisfied that the application meets the criteria, they are required to issue a written TCO, specifying which tariff item from Schedule 4 of the Customs Tariff Act 1995 applies to the goods.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs can result in penalties. Although the explanatory statement does not detail specific offences or penalties, breaches of customs laws generally can lead to civil or criminal consequences. These may include fines and, in more severe cases, imprisonment. The exact penalties would be determined by the specific breach and relevant sections of the Customs Act 1901, which could impose fines up to several thousand dollars or imprisonment for several years depending on the severity and intent behind the breach. The legislation ensures that the rights of individuals and entities are protected, and any imposition of liability or disadvantage is strictly avoided as per Section 269S(1).