EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0835936
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.
Roadgear Australasia applied for a TCO in respect of certain rubber matting on 16 October 2008.
Instrument
TCO No 0835936 was made on 14 January 2009. It declares that those certain rubber matting 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. 0835936 is taken to have come into force on 16 October 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 Australian Parliament, established a framework for the imposition of customs duties on imported goods. The Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which provide for reduced rates of customs duty on certain goods. The 2009 Tariff Concession Instrument No. 0835936 was introduced to address the specific need for tariff concessions on certain rubber matting, reducing the duty rate from 5% to free for goods subject to this order. This legislative instrument was made in response to an application by Roadgear Australasia, and after determining that no substitutable goods were produced in Australia, the CEO was satisfied that the application met the core criteria. The policy objective is to provide economic relief and support to businesses by reducing the cost of importing specific goods, thereby encouraging trade and investment.
Scope and Application
The Customs Act 1901, specifically through its Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at applying lower rates of customs duty to specific goods. This legislative framework is designed to benefit importers by potentially reducing their duty liabilities on goods that are subject to a TCO. The Act applies to any person who may apply for such concessions in respect of goods, provided the application aligns with the criteria outlined and does not pertain to goods explicitly excluded under section 269SJ. The geographic scope of the Act is national, as it is a Commonwealth legislation. The application of a TCO is contingent upon the CEO's determination that no substitutable goods are produced in Australia in the ordinary course of business, as defined under sections 269C, 269D, and 269E. The TCOs themselves do not retroactively disadvantage any person by imposing liabilities or affecting rights accrued before the registration date, ensuring that the concessions only apply prospectively from the date the application for the TCO was lodged.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines a scheme where Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty to certain goods (section 269F). For an application to be considered, it must not pertain to goods specified in section 269SJ, which are ineligible for TCOs. The CEO must ensure that the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). This means that the goods must be unique or have no equivalent domestically produced alternatives that serve the same purpose.
The obligations under the Act require applicants to demonstrate that the goods they seek a concession for are not produced domestically, thereby meeting the criteria for a TCO. The CEO has the responsibility to assess applications and determine whether they meet these criteria. If satisfied, the CEO must issue a written TCO, specifying the particular item in Schedule 4 of the Customs Tariff Act 1995 that applies to the goods in question (subsection 269P(3)). This process ensures that the concessions are granted fairly and based on the production status of the goods within Australia.
Failure to comply with the provisions of the Customs Act 1901 regarding the issuance of TCOs can result in legal consequences. If the CEO issues a TCO that does not meet the statutory criteria, this could be challenged in court, potentially leading to the TCO being overturned. Additionally, any misrepresentation or fraudulent application could result in penalties, as outlined in other sections of the Customs Act or related legislation, including fines or imprisonment depending on the severity of the breach. The specific penalties for such breaches are detailed elsewhere in the Act, ensuring that any misconduct is met with appropriate sanctions to maintain the integrity of the tariff concession scheme.