EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0836431
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.
Asphalt Company Australia Pty Ltd applied for a TCO in respect of certain asphalt plant on 22 October 2008.
Instrument
TCO No 0836431 was made on 16 January 2009. It declares that those certain asphalt plant 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. 0836431 is taken to have come into force on 22 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 was enacted to establish a comprehensive framework for customs duties and related matters. In addressing the need for tariff concessions, the Customs Act 1901 was amended to include a scheme under which Tariff Concession Orders (TCOs) could be made by the Chief Executive Officer of Customs (CEO). This legislation was introduced to allow for the application of lower rates of customs duty on specified goods, provided that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. The enactment of this scheme was aimed at facilitating trade by reducing the cost burden on importers for certain goods. The authority to make these orders lies with the CEO, who is required to consider applications under section 269F of the Act and ensure they meet the core criteria outlined in section 269C. The policy objective is to support economic efficiency and competitiveness by making essential goods more affordable for Australian businesses and consumers.
Scope and Application
The Tariff Concession Instrument No. 0836431, made under the Customs Act 1901, applies to the specific goods for which Asphalt Company Australia Pty Ltd has applied, namely certain asphalt plant. The instrument operates by granting a tariff concession order (TCO) that allows these goods to be imported at a duty rate of free, rather than the general rate of 5%, as specified in Schedule 4 to the Customs Tariff Act 1995. The instrument is applicable from the date the application was lodged, 22 October 2008, and the concession is effective as of that date, although it was formally registered on 16 January 2009. The TCO is designed to benefit importers by allowing them to apply for a refund of duty on goods imported since the effective date, without imposing any new liabilities or disadvantaging any person other than the Commonwealth. The instrument does not affect any pre-existing rights or liabilities of persons other than the Commonwealth in respect of activities conducted before the registration date. The Chief Executive Officer of Customs is mandated to consult with the public and consider any submissions regarding the application for a TCO, although in this instance, no submissions were received.
Key Provisions
The Customs Act 1901 establishes a framework for Tariff Concession Orders (TCOs) through Part XVA, which is primarily concerned with reducing customs duty rates for certain goods (s 269F). An application for a TCO can be made by any individual or entity to the Chief Executive Officer (CEO) of Customs. For the CEO to consider such an application, it must not pertain to goods listed in section 269SJ, which includes those goods that cannot be subject to a TCO. To meet the core criteria for approval, the application must demonstrate that, on the date of application, no substitutable goods were being produced in Australia in the ordinary course of business (s 269C). This criterion is further defined by sections 269B and 269D, which elaborate on what constitutes "goods produced in Australia" and "ordinary course of business," respectively. Additionally, section 269E clarifies the meaning of "substitutable goods" as those produced in Australia that can serve a similar use, including design purposes, as the goods for which the TCO is sought.
Entities and individuals subject to the Act must ensure that their applications for TCOs are made in accordance with the specified criteria. This involves providing adequate evidence that no substitutable goods are being produced domestically, thus justifying the concession. The CEO is obligated to make a written order if satisfied that the application meets the core criteria (s 269P(3)). Furthermore, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions against the TCO application. If no objections are received, the CEO is then required to proceed with issuing the TCO (s 269K(1)). The Act ensures that the rights of non-Commonwealth entities are protected, meaning that the TCO does not impose any liabilities or disadvantage them in relation to activities conducted prior to the TCO's registration date (s 269S(1)).
Failure to comply with the requirements set out in the Customs Act 1901 may lead to legal consequences. While the Act does not explicitly outline specific offences or penalties for breaches related to TCOs, general provisions within the Act and associated regulations may apply. Non-compliance with customs duties or the submission of fraudulent information could potentially lead to criminal charges, with penalties that may include fines or imprisonment, depending on the severity of the breach. Civil penalties may also apply, including the possibility of financial penalties for incorrect or misleading declarations. Importers can also apply for a refund of duty paid on goods imported since the TCO came into effect under paragraph 126(1)(r) of the Regulations.