EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1140600
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.
Laminex Group applied for a TCO in respect of certain press parts on 06 December 2011.
Instrument
TCO No 1140600 was made on 13 February 2012. It declares that those certain press 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. 1140600 is taken to have come into force on 06 December 2012.
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. 1140600, enacted in 2012, is a legislative instrument under the Customs Act 1901 that facilitates tariff concessions for specific imported goods. This instrument was introduced to address the need for reducing customs duty on goods for which there are no substitutable domestically produced alternatives, thereby supporting the competitiveness of Australian businesses and potentially lowering costs for consumers. The instrument was enacted by the Chief Executive Officer of Customs, pursuant to section 269F of the Customs Act, following an application by Laminex Group for tariff concessions on certain press parts. The objective of this instrument aligns with broader policy goals of fostering economic efficiency and protecting Australian industries where no local substitutes exist.
The instrument specifies that certain press parts are subject to a tariff concession, resulting in a reduction from the general duty rate of 5% to a free rate, effective from the date the application was lodged. This policy aims to benefit importers by potentially allowing them to claim refunds for duties paid on these goods since the commencement date. The process involved publishing a notice in the Gazette to invite public submissions, none of which were received, indicating no opposition to the tariff concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, authorises the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which apply reduced rates of customs duty on certain goods. This mechanism allows eligible applicants to seek tariff concessions for goods that are not produced in Australia and for which no substitutable goods are manufactured domestically. For instance, Laminex Group successfully applied for a TCO for specific press parts, which resulted in these goods being subject to a zero rate of duty, down from the general 5% rate. The Act mandates the CEO to assess applications against core criteria, including the absence of Australian-produced substitutable goods, and requires public notice to be given to allow for objections, although none were raised in this case. The TCO applies retroactively to the date of the application, benefiting importers by allowing them to seek refunds for duties paid on imports since that date. Importantly, the TCO does not affect pre-existing rights or impose new liabilities on any person other than the Commonwealth.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 1140600 (TCO No. 1140600) are sections 269C, 269B, and 269P of the Customs Act 1901. Section 269C specifies that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines the terms ‘goods produced in Australia’, ‘ordinary course of business’, and ‘substitutable goods’. Section 269P requires the Chief Executive Officer (CEO) of Customs to make a written order if satisfied that a TCO application meets the core criteria.
The Act imposes specific obligations on parties applying for a TCO. An applicant must ensure that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. Furthermore, the applicant must demonstrate that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. The CEO must then consider any submissions received before deciding whether to issue the TCO.
Under the Customs Act 1901, breaches of the requirements set out for TCOs may lead to civil or criminal consequences. While the explanatory statement does not explicitly mention penalties, the general legal framework around the Customs Act could include fines or imprisonment for non-compliance with the Act’s provisions. The maximum penalties for breaches would depend on the specific nature of the offence under the broader customs legislation.
In summary, TCO No. 1140600 declares that certain press parts are subject to a lower rate of customs duty under the Customs Tariff Act 1995, effective from the date of application, 06 December 2012. The CEO must ensure that the application meets the core criteria and publish a notice in the Gazette to allow for submissions. The rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the effective date of the TCO.