EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0844881
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.
Andrew Engineering Pty Ltd applied for a TCO in respect of certain bogie removal system parts on 04 December 2008.
Instrument
TCO No 0844881 was made on 27 February 2009. It declares that those certain bogie removal system parts 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. 0844881 is taken to have come into force on 04 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. 0844881, made under the Customs Act 1901, aims to address the issue of applying tariff concessions to specific goods to ensure fair trade practices. Enacted in 2009, this legislation was introduced to facilitate the application process for Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The instrument was designed to provide a lower rate of customs duty for certain goods, provided that no substitutable goods were produced in Australia at the time of the application. The policy objective, as outlined in the explanatory statement, is to allow the CEO to make a written order (a TCO) if satisfied that the application meets the core criteria, ensuring that the rights of importers are beneficially affected while not imposing any liabilities on any person.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislative framework enables the application of a lower rate of customs duty to goods specified in a TCO. Any person may apply to the CEO for a TCO, provided the goods in question are not those specified in section 269SJ of the Act that are ineligible for such concessions. The CEO's decision to grant a TCO hinges on the application meeting core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business on the date the application was lodged. The Act defines "substitutable goods" as those produced in Australia and capable of being used in the same way as the goods in the TCO application. If the CEO determines that the application meets these criteria, a TCO is issued, specifying the lower duty rate applicable to the goods. This mechanism benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO came into force. Notably, the TCO does not affect any pre-existing rights or impose new liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0844881, made under section 269F of the Customs Act 1901, outlines the procedure and criteria for granting a Tariff Concession Order (TCO). The CEO of Customs is required to assess applications for TCOs against the core criteria specified in section 269C. If satisfied that the application meets these criteria, the CEO must issue a written order (section 269P(3)), which provides for a lower rate of customs duty on the specified goods. In this case, the TCO No. 0844881, issued on 27 February 2009, applies to certain bogie removal system parts, granting them a duty-free status as they are considered to have no substitutable goods produced in Australia (section 269D).
The obligations imposed by the Customs Act 1901 on parties applying for a TCO include ensuring that the application is valid and meets the core criteria, as outlined in sections 269C and 269SJ. The CEO must also publish a notice in the Gazette, inviting submissions from any interested parties (subsection 269K(1)). For the TCO to be effective, it must be lodged and the CEO must be satisfied that the goods in question do not have substitutable counterparts produced in Australia, as defined by section 269E. The Act also mandates that the TCO should not disadvantage any person other than the Commonwealth or impose any liabilities on them in respect of actions taken before the TCO's effective date.
Failure to comply with the requirements of the Customs Act 1901 and the associated regulations can result in various civil and criminal consequences. While the specific offences and penalties are not detailed in the explanatory statement, breaches of customs legislation can generally lead to fines, imprisonment, or both, depending on the severity of the offence. The maximum penalties are set out in the applicable regulations and can vary widely based on the nature and extent of the breach. It is important for applicants and other stakeholders to adhere to the legislative framework to avoid these adverse outcomes.