EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1137365
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.
McConnell Dowell Constructors applied for a TCO in respect of certain Walking Bridge Parts on 08 November 2011.
Instrument
TCO No 1137365 was made on 30 January 2012. It declares that those certain walking bridge parts 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. 1137365 is taken to have come into force on 08 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 Tariff Concession Instrument No. 1137365 was enacted in 2012 under the Customs Act 1901. This legislation addresses the need for tariff concessions on specific imported goods, allowing for reduced customs duties where applicable. This instrument was introduced by the Chief Executive Officer of Customs, in accordance with the provisions outlined in Part XVA of the Customs Act 1901, which facilitates the application process for Tariff Concession Orders (TCOs). The policy objective of this legislation is to provide tariff relief on certain goods, provided they meet specific criteria, thereby benefiting importers by reducing the duty rates on these items.
The instrument was enacted following an application by McConnell Dowell Constructors for a TCO on certain Walking Bridge Parts. The Customs Act 1901 mandates that if the CEO is satisfied that no substitutable goods are produced in Australia, a TCO can be issued. In this case, the CEO determined that the application met the necessary criteria, resulting in the issuance of TCO No. 1137365, which specifies that these particular bridge parts are subject to a zero-duty rate, as opposed to the general rate of 5%. The instrument came into force on the date the application was lodged, 8 November 2011, and ensures that the rights of importers are positively affected while not imposing any new liabilities.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the implementation of Tariff Concession Orders (TCOs) through which lower rates of customs duty are applied to certain goods. This legislation applies to any person or entity that wishes to avail themselves of tariff concessions for goods imported into Australia. The scope of this Act is national, impacting the Commonwealth as well as individuals and businesses involved in the import of goods subject to TCOs. A TCO can only be applied for and granted by the Chief Executive Officer of Customs if the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO, and if the application meets the core criteria stipulated in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The Act provides for the CEO to issue TCOs through subordinate instruments, which extend or restrict the application of the Act to specific goods as per the provisions outlined. The TCO No 1137365, for instance, grants a tariff concession on certain walking bridge parts, with the rate of duty for these goods set at free instead of the general rate of 5%.
Key Provisions
The Customs Act 1901 (the Act) facilitates the reduction of customs duty on specific goods through Tariff Concession Orders (TCOs), as outlined in Part XVA. Section 269F of the Act allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided they are not specified in section 269SJ, which lists goods ineligible for a TCO. For a TCO application to be considered, the CEO must ensure that on the day the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business, as per section 269C. The definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are found in sections 269D, 269E, and 269F of the Act, respectively. If the CEO confirms that the application meets these core criteria, they must issue a written TCO, as stipulated in section 269P(3).
The obligations imposed by the Act on the parties involved primarily revolve around the application process for a TCO. An applicant, such as McConnell Dowell Constructors in this instance, must submit a valid application to the CEO, ensuring that the goods in question meet the eligibility criteria for a TCO. The CEO, in turn, must review the application to determine if it meets the core criteria and, if satisfied, must issue a TCO. The CEO is also required to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested parties to submit objections. In this case, no submissions were received in response to the invitation, indicating the CEO's decision was uncontested.
Should there be any breach of the provisions under the Customs Act 1901, the consequences can be both civil and criminal. For instance, any misrepresentation or false statement made in a TCO application could lead to civil penalties under the Customs Act, including fines, or even criminal charges, depending on the severity and intent of the offence. The Act does not specify maximum penalties for breaches, but such consequences would be determined in a court of law based on the particular circumstances of the breach. The Act ensures that the rights of importers are protected, and they may apply for a refund of duty on goods imported since the TCO came into effect, under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person, ensuring that it does not disadvantage individuals or entities other than the Commonwealth.