EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0844402
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.
Stauff Corporation applied for a TCO in respect of certain filters and or filter inserts on 17 December 2008.
Instrument
TCO No 0844402 was made on 13 March 2009. It declares that those certain filters and or filter inserts 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. 0844402 is taken to have come into force on 17 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. 0844402 was enacted in 2009 under the Customs Act 1901 to address the need for tariff concessions on certain goods that are not produced domestically, thus avoiding the imposition of customs duties on these goods. This instrument was introduced to provide relief to importers of specified items, ensuring that they are not subjected to duty rates applicable to goods that could potentially be produced in Australia. The instrument was created in response to an application by Stauff Corporation for tariff concessions on certain filters and filter inserts, which the Chief Executive Officer of Customs found to meet the core criteria as no substitutable goods were being produced in Australia. The policy objective is to facilitate the importation of these goods by applying a zero rate of duty, thereby benefiting importers and potentially encouraging competition within the market.
The Australian Parliament enacted this legislation to streamline the process of obtaining tariff concessions, ensuring that the application process is transparent and allows for public submissions. In this instance, no submissions were received, and the tariff concession order was made on 13 March 2009. The instrument came into effect on the date the application was lodged, 17 December 2008, and it does not affect any pre-existing rights or impose new liabilities on any party except the Commonwealth. Importers will be able to apply for duty refunds for goods imported since the effective date of the tariff concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This process allows for the application of a lower rate of customs duty to specified goods, provided certain criteria are met. An entity or individual can apply for a TCO under section 269F of the Act, provided the goods in question are not those listed in section 269SJ, which are ineligible for such concessions. The CEO evaluates whether the application meets the core criteria set out in section 269C, which requires, among other things, that no substitutable goods are being produced in Australia at the time of the application. If the application is approved, a TCO is issued, as was the case with Stauff Corporation's application for certain filters and filter inserts, which resulted in Instrument TCO No 0844402. This instrument applies a duty rate of free on these goods, down from the general rate of 5%. The TCO does not retroactively affect any rights or impose liabilities on individuals or entities other than the Commonwealth, ensuring that it only benefits importers by potentially allowing them to claim refunds on duties paid prior to the TCO's effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0844402 (F2009L01763) include section 269C, which sets out the criteria that a Tariff Concession Order (TCO) application must meet, and section 269P(3), which requires the Chief Executive Officer of Customs (CEO) to make a written order if the application meets the core criteria. Specifically, section 269C states that an application for a TCO meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied with the application, they must issue a written TCO specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question. This instrument declares that certain filters and or filter inserts are subject to a 5% duty rate, but with the TCO in place, this rate is reduced to free.
Under this Act, the CEO has specific obligations when considering a TCO application. Firstly, the CEO must publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). If no submissions are received, the CEO proceeds to decide whether the application meets the core criteria. The CEO must ensure that the goods in question do not have any substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. The CEO's decision is pivotal in determining whether the TCO will be issued, thereby affecting the customs duty applicable to the specified goods.
The Act also outlines potential consequences for non-compliance or misuse of the TCO provisions. While the explanatory statement does not detail specific criminal or civil penalties for breach, it is reasonable to infer that any improper application or misuse of the TCO could lead to legal action under the Customs Act 1901. The penalties for such breaches could include fines and imprisonment, depending on the severity and intent behind the breach. Additionally, any person who provides false or misleading information in an application for a TCO could face legal consequences under relevant Australian legislation, which may include fines or other penalties as prescribed by law.
In summary, Tariff Concession Instrument No. 0844402 provides a framework for the CEO to issue TCOs that reduce the customs duty on specified goods, provided the application meets the criteria set out in the Customs Act 1901. The CEO's role is crucial in assessing applications and ensuring compliance with the statutory requirements. Failure to adhere to the provisions of the Act could result in significant legal repercussions, underscoring the importance of accuracy and honesty in the application process.