EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902064
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.
Gempro Pty Ltd applied for a TCO in respect of certain tubings on 21 January 2009.
Instrument
TCO No 0902064 was made on 17 April 2009. It declares that those certain tubings 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. 0902064 is taken to have come into force on 21 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 Tariff Concession Instrument No. 0902064, enacted in 2009, is an instrument under the Customs Act 1901 designed to provide tariff concessions for certain goods, specifically addressing the gap by which some imported goods could benefit from lower customs duty rates. This instrument was created to facilitate the application process for Tariff Concession Orders (TCOs), allowing the Chief Executive Officer of Customs to grant reduced customs duties on goods that meet specific criteria, namely that no substitutable goods are produced in Australia. This legislative measure ensures that importers of these particular goods, in this case certain tubings, can access duty-free imports, thereby promoting trade efficiency and reducing costs for businesses reliant on these imports.
The policy objective, as outlined in the explanatory statement, is to encourage trade by reducing the financial burden on importers who rely on specific goods not produced domestically. By allowing a zero percent duty rate on the specified tubings, the Tariff Concession Instrument No. 0902064 aims to benefit businesses that import these goods, thereby fostering a more competitive market environment. The instrument was enacted following a formal application process by Gempro Pty Ltd, and it came into effect on the date the application was lodged, 21 January 2009, with no retroactive impact on prior transactions.
Scope and Application
The Customs Act 1901, through its Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply a lower rate of customs duty to specific goods. This concession is available to applicants who meet the core criteria outlined in the Act, which includes ensuring that no substitutable goods are produced in Australia at the time of application. The scope of the Act applies to any person who wishes to apply for a TCO for goods not specified in section 269SJ of the Act, which excludes certain types of goods from eligibility. The geographic reach of the Act is federal, impacting all customs activities across Australia. The Act also mandates that any person considering objections to a TCO must submit these within a specified timeframe after the publication of the application in the Gazette. Exemptions and thresholds are defined within the Act, particularly regarding the production of substitutable goods in Australia and the ordinary course of business. The application and effects of TCOs may be further detailed or modified through subordinate instruments, ensuring flexibility in administering the concessions.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the process for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). This legislative instrument allows for a reduced rate of customs duty on goods that are subject to a TCO. When an application for a TCO is submitted, the CEO must determine if it meets the core criteria specified in section 269C. This requires that, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the CEO is satisfied that the application meets these criteria, they are mandated to issue a written TCO (section 269P(3)).
The obligations under the Act involve both the applicant and the CEO. The applicant must ensure their application is valid and meets the criteria for a TCO, particularly that the goods in question have no substitutable equivalents produced in Australia. The CEO, on the other hand, is required to review the application and determine its validity and compliance with the Act's stipulations. Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette, inviting submissions from any interested parties who may oppose the TCO. In the case of TCO No. 0902064, no submissions were received.
For breaches of the provisions under this Act, specific penalties are outlined in the legislation. Offences that contravene the Act may result in civil or criminal consequences, including fines and imprisonment, although the exact penalties are not detailed in the explanatory statement. However, it is clear that non-compliance with the Act's requirements can lead to significant legal repercussions for the parties involved.