EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1139324
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.
Australian Brushware Corporation applied for a TCO in respect of certain rollers and pads on 25 November 2011.
Instrument
TCO No 1139324 was made on 13 February 2012. It declares that those certain rollers and pads 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. 1139324 is taken to have come into force on 25 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, provides a framework for the administration of customs and excise duties and for the control of goods entering and leaving Australia. This Act was introduced to address the need for a structured approach to the management of customs duties and the regulation of goods in and out of the country. Under this Act, the Chief Executive Officer of Customs is empowered to make Tariff Concession Orders (TCOs) which can lower the rate of customs duty on certain goods. One such order, TCO No. 1139324, was issued on 13 February 2012, following an application by the Australian Brushware Corporation for a concession on certain rollers and pads. The policy objective of this legislation is to encourage the production of certain goods within Australia by providing tariff concessions where no substitutable goods are produced locally, thereby supporting local industry and economic development.
Scope and Application
The Tariff Concession Instrument No. 1139324 applies to the Customs Act 1901, specifically concerning Tariff Concession Orders (TCOs) as outlined in Part XVA of the Act. This legislation pertains to individuals or entities seeking to apply for a TCO, which involves the reduction or exemption of customs duty on certain goods. The Act applies to goods for which an application is made to the Chief Executive Officer of Customs (CEO) and, if the application meets the core criteria set out in the Act, results in a written order that specifies the goods to which a prescribed tariff item applies. This instrument affects industries and transactions involving the importation of goods, particularly those that are not substitutable by goods produced within Australia, thereby qualifying for tariff concessions. Geographically, the application and effect of the TCO are within the Commonwealth of Australia, as the Act is a federal law. The TCO does not impose any liabilities on individuals or entities other than the Commonwealth and does not disadvantage any person by affecting their rights as they stood on the date of registration. However, it does provide a benefit to importers who can apply for a refund of duty on the specified goods imported since the TCO came into force. Any exclusions or limitations are those specified in section 269SJ of the Act, which details goods that cannot be the subject of a TCO. The scope and application of the Act can be further extended or modified through subordinate instruments, as necessary.
Key Provisions
The main operative sections of this legislation revolve around the establishment and requirements for Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F (1) allows for the application of a TCO by an individual or entity to the Chief Executive Officer of Customs (CEO) for certain goods. Section 269C sets the core criteria that must be satisfied for an application to be successful, namely, that no substitutable goods were produced in Australia on the day the application was lodged. Once the CEO is satisfied that the application meets these criteria, they must issue a written TCO under section 269P(3), specifying that the goods in question will be subject to a prescribed rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by this legislation on the parties governed by it primarily involve the submission and review of applications for TCOs. The CEO must ensure that applications are assessed against the core criteria outlined in section 269C. If the CEO determines that the application meets the criteria, they must publish a notice in the Gazette under section 269K(1) inviting any interested party to submit objections. In the case of Tariff Concession Order No. 1139324, the CEO did not receive any submissions, allowing the order to proceed. The CEO must also ensure that the TCO does not affect the rights of any person as at the date of registration, and that it does not impose any liabilities on any person, as stated in section 269S(1).
In terms of breaches, the Customs Act 1901 does not explicitly detail offences or penalties for non-compliance with the provisions of a TCO. However, general provisions of the Act may apply to any breaches of its requirements. For example, section 227 of the Customs Act 1901 outlines the penalties for making false statements or representations, which can include fines and imprisonment. Additionally, section 228 of the Act deals with the offence of evading duty, which can result in penalties including fines and imprisonment. Although these sections are not specific to TCOs, they provide a framework within which non-compliance with the Act can be prosecuted.