EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0842884
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.
Cmi Forge Pty Ltd applied for a TCO in respect of certain 15b34m bars or rods on 05 December 2008.
Instrument
TCO No 0842884 was made on 27 February 2009. It declares that those certain 15b34m bars or rods 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. 0842884 is taken to have come into force on 05 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 Instrument No. 0842884 was enacted in 2009 under the Customs Act 1901 to address the need for concessional tariff rates on specific goods that are not produced in Australia. This legislation was introduced by the Chief Executive Officer of Customs to streamline the application process for tariff concessions, ensuring that importers benefit from lower customs duty rates on certain goods. The objective of this instrument is to provide relief to importers by reducing the tariff on particular goods, thereby encouraging trade and supporting businesses that rely on importing these goods. The instrument was made following an application by Cmi Forge Pty Ltd for a tariff concession on certain 15b34m bars or rods, which was subsequently approved as no substitutable goods were produced in Australia at the time of the application. The concession effectively reduces the duty on these goods from 5% to free, providing a significant benefit to the importers involved.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to provide tariff concessions on specific goods. This Act applies to individuals or entities that wish to apply for a TCO for goods, which may include businesses and importers. The scope of the Act extends to ensuring that the goods for which a concession is sought are not substitutable goods produced in Australia, as outlined in section 269SJ. The geographic reach of this Act is national, as it applies across Australia in accordance with federal customs laws. Exclusions from TCO eligibility are clearly defined in the Act, particularly under section 269SJ, which lists goods that cannot be subject to a TCO. The application of the Act may be further refined or detailed through subordinate instruments, which could provide additional criteria or processes for TCO applications. Importantly, once a TCO is registered, it does not retroactively disadvantage or impose liabilities on individuals or entities for actions taken prior to the TCO’s effective date, thereby protecting their pre-existing rights and obligations.
Key Provisions
The primary operative sections of the Customs Act 1901, specifically under Part XVA, pertain to the process of making Tariff Concession Orders (TCOs) as detailed in section 269F. An individual or entity may apply to the Chief Executive Officer (CEO) of Customs for a TCO, as long as the goods in question are not those prohibited by section 269SJ. For the application to meet the core criteria, the CEO must ascertain, as per section 269C, that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was submitted. Definitions for terms such as 'substitutable goods', 'ordinary course of business', and 'goods produced in Australia' are provided in sections 269B, 269D, and 269E respectively.
Under the Act, the CEO has the obligation to evaluate TCO applications against the core criteria and, if satisfied, to issue a written order as a Tariff Concession Order (section 269P(3)). This obligation includes publishing a notice in the Gazette inviting public submissions, as outlined in subsection 269K(1), although in this case, no submissions were received. The TCO process ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the registration of a TCO. This is stipulated in subsection 269S(1) which states that a TCO is effective from the day the application was lodged, and it does not impose any liabilities on individuals or entities for actions taken before the TCO's effective date.
Breaching the requirements of the Customs Act 1901 or the terms of a TCO can result in civil or criminal penalties, depending on the nature and severity of the breach. For instance, misleading statements or providing false information in an application for a TCO could be considered an offence under the Act. Penalties for breaches may include fines or imprisonment as prescribed under the respective sections of the Act. However, the specifics of the penalties are not detailed within the text of the Explanatory Statement and would need to be referred to in the full Act or associated regulations for precise information.