EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0817469
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.
Gea Process Engineering Pty Ltd applied for a TCO in respect of certain filter membrane insert on 11 July 2008.
Instrument
TCO No 0817469 was made on 03 October 2008. It declares that those certain filter membrane insert 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. 0817469 is taken to have come into force on 11 July 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 Parliament of Australia, provides a framework for the regulation of customs duties and import regulations, with Part XVA specifically addressing Tariff Concession Orders (TCOs). These TCOs allow for reduced customs duty rates on certain goods, provided they meet specific criteria such as not having substitutable goods produced in Australia. The Tariff Concession Instrument No. 0817469, issued in 2008, was introduced to address the need for tariff concessions on specific goods, in this case, certain filter membrane inserts, which were found not to have substitutable equivalents produced domestically. This instrument was created to provide a concessional duty rate for these imports, reducing the general rate of 5% to a zero rate. The instrument was subject to public consultation as per the Act’s requirements, though no objections were received. The concessional tariff rate applies from the date the application was lodged, 11 July 2008, and benefits importers by potentially allowing them to seek refunds on duties paid prior to the concession's implementation.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which are designed to apply a lower rate of customs duty on specified goods. These concessions are contingent upon an application being made by a person to the CEO and subsequently meeting the core criteria outlined in the Act, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This legislative framework extends its application to any entity or individual seeking tariff concessions for imported goods, provided the goods do not fall under the exclusions specified in section 269SJ of the Act. The geographic and jurisdictional reach of this legislation is national, as it operates under the authority of the Commonwealth of Australia. The TCO in question, Instrument No. 0817469, pertains to certain filter membrane inserts and was made effective from 11 July 2008, the date of the application. The TCO does not retroactively impact the rights of any person other than the Commonwealth and does not impose new liabilities on any party. Instead, it provides potential benefits to importers who may apply for a refund of duty on these goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901, specifically related to Tariff Concession Orders (TCOs) under Part XVA, outline the process for applying for and granting tariff concessions on imported goods. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. The CEO must assess the application against the core criteria specified in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they are required under section 269P(3) to issue a written TCO declaring the applicable customs duty rate for the specified goods. For example, TCO No. 0817469, made on 3 October 2008, declares that certain filter membrane inserts are subject to a duty-free rate under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved in the TCO process. The CEO must ensure that the application meets the core criteria and consider submissions from any interested parties, as outlined in section 269K(1). Additionally, the CEO must publish a notice in the Gazette inviting comments on the application and must make a written order if the criteria are met. Importers and applicants for TCOs must provide accurate and complete information to the CEO and adhere to any conditions imposed by the TCO. The CEO's decision-making process must be transparent and consider any submissions received from the public.
The Customs Act 1901 also includes provisions for offences, penalties, and civil or criminal consequences for breaches of the legislation. Although the specific penalties are not detailed in the explanatory statement, the Act generally provides for fines and imprisonment for offences related to customs duty and fraud. For instance, section 254 of the Act stipulates that a person who knowingly makes a false statement or representation in an application for a TCO can be subject to penalties, including fines and imprisonment. The severity of the penalties can vary based on the nature and extent of the breach, but the Act aims to enforce compliance with its provisions to ensure the integrity of the customs duty system.