EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902393
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.
ED Oates Pty Ltd applied for a TCO in respect of certain aluminium scouring pads on 21 January 2009.
Instrument
TCO No 0902393 was made on 17 April 2009. It declares that those certain aluminium scouring pads 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. 0902393 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 Customs Act 1901, specifically Part XVA, introduced a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislative provision was enacted to facilitate tariff concessions for certain imported goods, provided that these goods are not substitutes for products already manufactured domestically. The primary objective is to ensure that imports are not in competition with local production unless there is no domestic equivalent, thereby protecting Australian industries while also promoting the entry of beneficial goods. The Parliament established this mechanism to balance economic interests by allowing for tariff reductions on specific goods, contingent on the absence of domestic production. The Explanatory Statement for Tariff Concession Instrument No. 0902393 exemplifies this process, detailing how a TCO was granted to ED Oates Pty Ltd for certain aluminium scouring pads, reflecting the Act's policy objective to encourage imports that do not undermine local manufacturing.
Scope and Application
The Customs Act 1901, through its Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at granting lower rates of customs duty on specific goods. This legislation applies to any person or entity that may lodge an application for a TCO under section 269F, provided that the goods in question are not listed in section 269SJ, which excludes certain items from eligibility for tariff concessions. The application process necessitates that, at the time of application, no substitutable goods are being produced in Australia as defined by sections 269D and 269E. The TCO scheme operates across the Commonwealth of Australia, affecting imports subject to the specified concessions. The Explanatory Statement for Tariff Concession Instrument No. 0902393 clarifies that the CEO’s decision to grant a TCO is contingent on satisfying core criteria and that any TCO made does not affect pre-existing rights or liabilities of non-Commonwealth persons. The TCO No. 0902393, made on 17 April 2009, effectively reduced the duty on certain aluminium scouring pads to free, from the general rate of 5%, based on the CEO's finding that no substitutable goods were produced in Australia at the time of application. The TCO came into force on the date of the application, 21 January 2009, with no adverse effect on existing rights or imposition of new liabilities, and it allows importers to apply for duty refunds on eligible goods imported since the effective date.
Key Provisions
The main sections of the Customs Act 1901 relevant to the Tariff Concession Order (TCO) include section 269F, which allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO, and section 269C, which outlines the core criteria that the CEO must consider when deciding whether to grant the application. If the CEO is satisfied that the application meets the core criteria, they are required to make a written order, a TCO, as stated in section 269P(3). In this particular case, TCO No. 0902393, issued on 17 April 2009, declares that certain aluminium scouring pads are subject to a zero rate of customs duty under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Customs Act 1901 imposes specific obligations on the CEO of Customs when processing a TCO application. Firstly, the CEO must ensure that the application is not for goods specified in section 269SJ, which lists items that cannot be subject to a TCO. The CEO must also determine if the application meets the core criteria set out in section 269C, which involves confirming that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the application meets these criteria, the CEO must make the TCO and publish a notice in the Gazette inviting submissions from any interested parties. In this case, no submissions were received.
The Customs Act 1901 includes provisions for offences, penalties, and consequences for breaches related to TCOs. However, the specific details of penalties for non-compliance with the TCO provisions are not outlined in the explanatory statement. Generally, breaches of the Customs Act can result in both civil and criminal penalties. Civil penalties can include fines and other monetary penalties, while criminal penalties can include imprisonment, fines, or both, depending on the severity of the breach. The maximum penalties for specific offences under the Customs Act would need to be referred to for precise details.