EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0843278
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.
Vemag Australia applied for a TCO in respect of certain brine mixers on 09 December 2008.
Instrument
TCO No 0843278 was made on 06 March 2009. It declares that those certain brine mixers 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. 0843278 is taken to have come into force on 09 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for administering customs and excise duties. Specifically, Part XVA of the Act introduces the mechanism for Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on certain goods, provided specific criteria are met. This scheme was introduced to address the need for flexibility in tariff rates to support specific economic or policy objectives, such as promoting local industries or facilitating trade. The Tariff Concession Instrument No. 0843278, made by the Chief Executive Officer of Customs, exemplifies this mechanism by applying to certain brine mixers, reducing their duty rate from 5% to free, reflecting the policy objective of supporting the importation of these goods by exempting them from duty. The instrument came into force on the date the application was lodged, ensuring that the rights of importers are beneficially affected without imposing any liabilities.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs) scheme, provides a mechanism for the Chief Executive Officer of Customs (CEO) to reduce the customs duty on specific goods, thereby encouraging the importation of goods that are not produced in Australia. The application of this Act is primarily directed towards individuals or entities seeking to import goods that would benefit from reduced customs duties, provided that no substitutable goods are produced in Australia. The scope of this Act extends to any goods for which a TCO can be applied, with the condition that they do not fall under the restricted list specified in section 269SJ. The Act's application is national, applying across all jurisdictions in Australia, but it is administered under the Commonwealth framework. Importantly, the Act does not affect pre-existing rights of any person other than the Commonwealth, nor does it impose liabilities for actions taken before the TCO's registration. The CEO is mandated to publish a notice in the Gazette upon accepting a TCO application, inviting any interested parties to submit objections, although no submissions were received in the case of TCO No. 0843278. The TCO's effective date is the date the application was lodged, meaning the concession applies retroactively from that date, allowing for duty refunds on imports made since then.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0843278 under the Customs Act 1901 (section 269C, 269P(3), 269S(1)) establish the process by which a Tariff Concession Order (TCO) may be made by the Chief Executive Officer of Customs (section 269F). If an application for a TCO is made and the CEO determines that the core criteria are met, a TCO is issued, resulting in a concession on the customs duty for the specified goods (section 269P(3)). In this case, the instrument declares that certain brine mixers are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, reducing the duty rate from 5% to free (section 269P(3)). The TCO comes into force on the day the application was lodged (section 269S(1)), in this case 9 December 2008.
Under the Customs Act 1901, the CEO has specific obligations and requirements when processing a TCO application. The CEO must first ensure the application is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. If the application is valid, the CEO must determine whether it meets the core criteria outlined in section 269C, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Definitions of key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F respectively. If the core criteria are satisfied, the CEO must issue a written order (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (section 269K(1)).
The Customs Act 1901 does not explicitly outline specific offences or penalties for breaching the provisions related to Tariff Concession Orders. However, any failure to comply with the requirements of the Act, including the improper application or issuance of a TCO, could potentially lead to legal consequences. The penalties for such breaches would depend on the specific nature of the breach and could involve civil or administrative penalties as outlined in other sections of the Customs Act 1901 or related legislation. It is important to note that the TCO itself does not impose any liabilities on any person and does not affect the rights of a person (other than the Commonwealth) as at the date of registration (section 269S(1)).
In summary, the Tariff Concession Instrument No. 0843278 under the Customs Act 1901 allows for a reduction in customs duty on certain brine mixers, provided the CEO is satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO has specific obligations to ensure the application meets the core criteria and to publish a notice inviting submissions. While the Act does not specify penalties for breaches related to TCOs, any non-compliance could result in legal consequences under the Customs Act 1901 or related legislation.