EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902632
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.
Baulderstone Hornibrook applied for a TCO in respect of certain oil pressure power packs on 27 January 2009.
Instrument
TCO No 0902632 was made on 17 April 2009. It declares that those certain oil pressure power packs 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. 0902632 is taken to have come into force on 27 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 and is designed to regulate the import and export of goods, including the imposition of customs duties. Part XVA of this Act introduces a scheme for Tariff Concession Orders (TCOs), which allow for reduced customs duties on certain goods. This legislative instrument was introduced to address the gap in the duty structure that may have discouraged the import of specific goods by imposing high tariffs, thereby impacting the availability and affordability of these goods within Australia. Instrument No. 0902632, enacted on 17 April 2009, is an example of such a concession, applied to certain oil pressure power packs, where the duty rate was reduced from 5% to free of charge. The policy objective behind this measure is to ensure that Australian consumers and businesses have access to a broader range of competitively priced goods.
Scope and Application
The Customs Act 1901, as detailed in Tariff Concession Instrument No. 0902632, provides a mechanism for the Chief Executive Officer of Customs to grant tariff concessions on specific goods, thereby reducing the customs duty payable on those goods. This Act applies to any person or entity wishing to import goods that meet certain criteria, enabling them to apply for a Tariff Concession Order (TCO) if the goods are not substitutable by Australian-produced alternatives. The application process involves satisfying the core criteria outlined in the Act, specifically that no substitutable goods are produced in Australia in the ordinary course of business. The geographic scope of the Act is national, encompassing all Australian territories, as it operates under the purview of the Commonwealth. Exclusions apply to goods specified in section 269SJ, which cannot be subject to a TCO. The Act allows for the extension of its application through subordinate instruments, such as regulations, which can provide further detail on the implementation and administration of TCOs. The instrument in question, TCO No. 0902632, pertains to certain oil pressure power packs, for which the rate of duty was reduced to free, effective from the date of the application, 27 January 2009.
Key Provisions
The primary sections of this legislation concern Tariff Concession Orders (TCOs) and their application under Part XVA of the Customs Act 1901 (the Act). Specifically, section 269F allows for applications to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the application is not in relation to goods specified in section 269SJ, which lists those ineligible for a TCO, the CEO must assess whether the application meets the core criteria. Section 269C outlines that the application meets these criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This assessment hinges on the definitions provided in sections 269D, 269E, and 269F, concerning goods produced in Australia, the ordinary course of business, and substitutable goods, respectively. If the CEO is satisfied that the application meets the core criteria, they are required under subsection 269P(3) to issue a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff), specified in the order.
The obligations imposed by the Act on the parties and entities it governs include the requirement for applicants to ensure that their applications for TCOs are not in respect of goods specified in section 269SJ of the Act. The CEO is obligated to assess each valid application against the core criteria, specifically checking if substitutable goods were produced in Australia in the ordinary course of business on the application date. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted, as required by subsection 269K(1). If no submissions are received, the CEO must proceed with making the TCO. The Act also mandates that a TCO comes into force on the day the application is lodged, as per subsection 269S(1).
The legislation stipulates various consequences for breaches, though it does not explicitly outline criminal or civil penalties within the text provided. However, the general nature of the Act and its enforcement mechanisms imply that non-compliance with the provisions regarding TCO applications and the obligations of the CEO could result in legal action. For example, if the CEO fails to adhere to the statutory requirements in making a TCO, or if an applicant submits an ineligible application, both could face legal consequences under the broader framework of the Customs Act 1901. The specific penalties for such breaches would likely be determined by the relevant courts based on the circumstances of the breach and the broader legal context.