EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0900116
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.
General Petroleum Oil Tools applied for a TCO in respect of certain sucker rods on 09 January 2009.
Instrument
TCO No 0900116 was made on 17 April 2009. It declares that those certain sucker 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. 0900116 is taken to have come into force on 09 January 2009.
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 was enacted by the Australian Parliament to provide a framework for the regulation of customs and excise duties. The Act aims to streamline the process of applying for tariff concession orders, ensuring that the appropriate rate of customs duty is applied to specific goods. This is achieved through the establishment of a scheme under which Tariff Concession Orders can be made by the Chief Executive Officer of Customs, which then applies a lower rate of customs duty to the goods in question, provided certain criteria are met. The explanatory statement for Tariff Concession Instrument No. 0900116 clarifies the process and conditions under which such orders can be applied for and granted, ensuring that the system is transparent and fair for all parties involved. The policy objective is to facilitate trade by reducing the duty burden on goods that are not substitutable by Australian-produced alternatives, thereby encouraging economic efficiency and competitiveness in the market.
Scope and Application
The Tariff Concession Instrument No. 0900116 under the Customs Act 1901 applies specifically to the concession of customs duty for certain sucker rods imported into Australia. This Act allows for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which reduce the duty rate for goods not produced in Australia. The Act applies to any person who applies for a TCO in respect of specific goods, provided the application complies with the criteria set out in section 269C of the Customs Act. The TCO, in this case, benefits importers of sucker rods by applying a zero-rate duty on these goods, as opposed to the general 5% rate, thereby reducing the financial burden on importers. The application of this Act is national, as it falls under the Commonwealth jurisdiction, impacting importers across Australia. The Act does not disadvantage existing rights or impose new liabilities on any person except the Commonwealth. Furthermore, the Act allows for the extension of its application through subordinate instruments, ensuring that it can be adapted to various circumstances and industries as needed.
Key Provisions
The main operative sections of the Customs Act 1901, as related to Tariff Concession Orders (TCOs), are sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ (269C, 269B, 269D, 269E, 269F, 269P, 269SJ). Section 269F allows for applications to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, while section 269C specifies that a TCO application 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. This is defined further by sections 269B and 269E, which explain the meanings of terms such as 'goods produced in Australia' and 'ordinary course of business'. If the CEO is satisfied that the application meets the core criteria, section 269P(3) requires the CEO to make a written order declaring that the goods are subject to a prescribed rate of duty under Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved in the TCO process. Firstly, any person may apply to the CEO for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act (269SJ). The CEO must then decide whether the application meets the core criteria, as outlined in section 269C (269C). If the CEO is satisfied that the application meets these criteria, they must make a written order (a TCO) as per section 269P(3) (269P(3)). Additionally, under subsection 269K(1), the CEO is required to publish a notice in the Gazette, inviting any person who believes the TCO should not be made to lodge a submission with the CEO (269K(1)). The CEO must consider these submissions and decide whether to proceed with the TCO.
Under the Customs Act 1901, there are potential civil and criminal consequences for breaches of the Act’s provisions. While the Explanatory Statement does not detail specific offences or penalties, breaches of customs laws generally can lead to civil penalties, including fines, and in severe cases, criminal penalties such as imprisonment. The specific penalties would depend on the nature and severity of the breach, as well as any applicable regulations or subsidiary legislation. The Customs Act and associated regulations provide detailed information on the penalties for various breaches. It is also worth noting that the TCO itself does not impose any liabilities on any person, as stated in subsection 269S(1) (269S(1)).