EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0808724
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.
For Earth Pty Ltd applied for a TCO in respect of certain airstone on 19 May 2008.
Instrument
TCO No 0808724 was made on 08 August 2008. It declares that those certain airstones 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. 0808724 is taken to have come into force on 19 May 2008.
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 Commonwealth Parliament, provides a framework under which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) to lower customs duty rates on specified goods. The Tariff Concession Instrument No. 0808724 was introduced to address the need for concessional tariff treatment for certain airstones, as applied for by Earth Pty Ltd on 19 May 2008. The CEO of Customs was satisfied that no substitutable goods were produced in Australia, meeting the core criteria outlined in section 269C of the Act. Consequently, the TCO No. 0808724 was issued on 8 August 2008, declaring that the specified airstones are subject to a zero rate of duty, effective from the date the application was lodged, 19 May 2008. This legislative action aims to facilitate the importation of these goods without imposing additional liabilities on importers or affecting existing rights.
Scope and Application
The Tariff Concession Instrument No. 0808724 under the Customs Act 1901 applies to specific goods for which a Tariff Concession Order (TCO) has been applied and approved by the Chief Executive Officer of Customs. This Act facilitates reduced customs duty rates for goods that are not substitutable with any produced domestically and for which a TCO application has been made. The application of this legislation is not limited by geographic boundaries, as it applies nationally across Australia. The scope of the Act is further clarified by its exclusion of certain goods that are specified in section 269SJ of the Act, which are ineligible for TCOs. The instrument extends its application through the subordinate Customs Tariff Act 1995, where specific tariff items are detailed. For instance, Instrument TCO No. 0808724 applies to certain airstones, granting them a duty-free status, which is effective from the date the application was lodged, irrespective of when the actual order was made.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0808724 under the Customs Act 1901 include sections 269C, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) concerning specific goods, provided they are not listed in section 269SJ, which specifies goods that cannot be subject to a TCO. Section 269C requires the CEO to determine whether an application meets the core criteria, specifically if no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets the criteria, they must issue a written TCO under section 269P(3), specifying the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations imposed by the Act on the parties or entities it governs include the requirement for the CEO to make a TCO if the application satisfies the core criteria and to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. The CEO must consider these submissions and decide whether to proceed with the TCO. Additionally, Earth Pty Ltd, the applicant in this case, must ensure their application is valid and meets the criteria outlined in the Act. The CEO's obligations also include verifying that no substitutable goods were produced in Australia on the day the application was lodged, as outlined in section 269C.
Breaches of the obligations or requirements under the Act can lead to various civil or criminal consequences. While the Act does not explicitly state specific offences, failure to comply with the provisions may result in legal actions being taken against the party responsible for the breach. For example, if the CEO fails to properly assess an application or publishes an incorrect notice, this could lead to legal disputes. The penalties for non-compliance are not explicitly stated in the Act but may involve financial penalties or other legal actions depending on the nature and severity of the breach. The Act also ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO, thus providing a safeguard against potential misuse or improper application of the concession.