EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0842377
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.
Dept of Defence applied for a TCO in respect of certain towed flexible barge discharge system on 02 December 2008.
Instrument
TCO No 0842377 was made on 27 February 2009. It declares that those certain towed flexible barge discharge system 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. 0842377 is taken to have come into force on 02 December 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 Tariff Concession Order No. 0842377, enacted under the Customs Act 1901, addresses the issue of providing tariff concessions for specific imported goods where there is no domestic production of substitutable goods. This legislative instrument, issued by the Chief Executive Officer of Customs, applies to certain towed flexible barge discharge systems and was introduced to ensure that these goods benefit from a reduced rate of customs duty, specifically zero percent, as opposed to the general rate of five percent. The objective of this order, as outlined in the explanatory statement, is to facilitate the importation of these goods without imposing any disadvantage or additional liabilities on importers, thereby aligning with the policy of promoting fair trade practices and economic efficiency. The order came into effect on the date of application, 2 December 2008, and no submissions were received in response to the published notice inviting public comment on the proposed tariff concession.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at providing lower customs duty rates for certain goods. A TCO can be applied for by any individual or entity seeking tariff concessions for specific goods, provided the goods are not among those excluded by section 269SJ of the Act, which lists items ineligible for TCOs. For an application to be considered, it must meet core criteria outlined in sections 269C and 269D of the Act, requiring that no substitutable goods are produced in Australia at the time of application. If these criteria are satisfied, the CEO must issue a TCO, as detailed in section 269P(3), specifying the applicable tariff item from Schedule 4 of the Customs Tariff Act 1995. The application process includes a mandatory publication in the Gazette, inviting any interested party to submit objections; however, in the case of TCO No. 0842377, no such objections were received. This TCO, effective from the date of application on 02 December 2008, applies to certain towed flexible barge discharge systems, reducing their duty from a general rate of 5% to free, without retroactively affecting any rights or imposing new liabilities on non-Commonwealth entities.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0842377 (F2009L01340) establish the framework for the application and approval process of a Tariff Concession Order (TCO). According to section 269F of the Customs Act 1901, an individual or entity may apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. The CEO must then determine if the application meets the core criteria outlined in section 269C, which require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269B and 269E). If the CEO is satisfied that these criteria are met, they must issue a written order (section 269P(3)) declaring that the specified goods are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must ensure that any TCO application is not in respect of goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO is also required to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested party to submit any reasons why the TCO should not be made (subsection 269K(1)). Additionally, the CEO must verify that the application meets the core criteria as outlined in section 269C. If satisfied, the CEO must proceed to issue a TCO in accordance with section 269P(3).
The Customs Act 1901 stipulates certain offences, penalties, and consequences for breach. However, the explanatory statement does not detail specific offences related to the TCO process. Nonetheless, any general contraventions of the Customs Act could potentially incur penalties, which vary depending on the nature and severity of the breach. The maximum penalties for customs-related offences can be significant, often involving fines or imprisonment, or both. The Act ensures that 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 in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)).