EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509137
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.
Alcan Gove Development Pty Limited applied for a TCO in respect of certain vertical pressure filtrate collectors on 19 July 2005.
Instrument
TCO No 0509137 was made on 07 October 2005. It declares that those certain vertical pressure filtrate collectors 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 10%. 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. 0509137 is taken to have come into force on 19 July 2005.
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. 0509137, enacted in 2005, is an instrument under the Customs Act 1901 designed to address the problem of applying tariff concessions to specific goods that are not produced in Australia and for which no suitable domestic alternatives exist. This instrument was introduced to facilitate trade by reducing customs duties on certain imported goods, thereby encouraging their availability in the Australian market. The Customs Act 1901, enacted by the Australian Parliament, provides the legal framework for the administration of customs and excise, including the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs). The policy objective of this legislation is to promote economic efficiency and consumer choice by ensuring that imported goods for which no domestic equivalent is available are subject to a lower rate of customs duty, ultimately benefiting importers and potentially lowering costs for consumers.
Scope and Application
The Tariff Concession Instrument No. 0509137, under the Customs Act 1901, applies to specific goods identified in the instrument, in this case, certain vertical pressure filtrate collectors. The Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce the rate of customs duty on eligible goods, provided that the application for the concession meets the core criteria set out in the Act. The application process requires the CEO to assess whether substitutable goods are being produced in Australia at the time of application. The application in question, made by Alcan Gove Development Pty Limited on 19 July 2005, was approved, and the resulting TCO No. 0509137 was published on 7 October 2005. The TCO, which came into force on the date of application, reduces the duty on these goods from 10% to free, benefiting importers of the specified goods who can now apply for refunds on duties paid prior to the TCO's effective date. This instrument operates nationally, applying across all jurisdictions within Australia and does not impose any liabilities on any person. The scope of the TCO is confined to the specified goods and does not disadvantage any existing rights or impose liabilities for actions taken prior to the TCO's registration.
Key Provisions
The Customs Act 1901, specifically under Part XVA, governs the creation of Tariff Concession Orders (TCOs) which allow for a reduced rate of customs duty on certain goods. When a person applies for a TCO under section 269F, they must ensure their application is not in respect of goods specified in section 269SJ, which outlines ineligible items. The Chief Executive Officer of Customs (CEO) then evaluates whether the application meets the core criteria as outlined in section 269C, which requires that no substitutable goods are produced in Australia in the ordinary course of business. If satisfied, the CEO must make a written order under subsection 269P(3), declaring that the goods in question are subject to a specific item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act include the requirement for the CEO to publish a notice in the Gazette, inviting submissions from any interested parties once an application is deemed valid (subsection 269K(1)). This notice allows stakeholders to express their views on why a TCO should not be granted. In this instance, no submissions were received. Furthermore, TCOs do not affect the rights of any person, other than the Commonwealth, as at the date of registration, ensuring that no one is disadvantaged or incurs liabilities for actions taken prior to the TCO's registration (subsection 269S(1)).
Offences under the Customs Act 1901 can lead to significant consequences. The Act does not specify particular offences related to the creation or misuse of TCOs, but general contraventions of the Customs Act can incur civil or criminal penalties. For instance, under section 228 of the Customs Act, any person found guilty of knowingly making a false statement or providing misleading information can face fines up to $22,200 for individuals and $111,000 for corporations, or imprisonment for up to two years, or both. These penalties underscore the importance of compliance with the Act’s provisions to avoid severe repercussions.