EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902636
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 plc control units on 27 January 2009.
Instrument
TCO No 0902636 was made on 17 April 2009. It declares that those certain plc control units 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. 0902636 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, enacted by the Australian Parliament, establishes a framework through which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs). These orders provide for a reduced rate of customs duty on specific goods. The problem or gap this legislation was introduced to address is the ability to provide tariff concessions on certain goods where no substitutable goods are produced in Australia, thereby potentially benefiting importers and fostering competitive practices. Instrument No. 0902636, made on 17 April 2009, is an example of such a concession, applying to certain plc control units with a general rate of duty of 5% reduced to free under the terms of the order. The policy objective is to ensure that the application process for tariff concessions is transparent and open to public scrutiny, with the CEO required to publish notices in the Gazette to invite submissions on applications. This particular TCO was not met with any objections from the public, highlighting its alignment with the legislative intent.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This mechanism allows for a lower rate of customs duty on goods that meet certain criteria. Any person can apply to the CEO for a TCO in respect of goods, provided those goods are not specified in section 269SJ of the Act. The CEO must assess whether the application meets the core criteria set out in section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are further clarified in the Act. Should the CEO find the application meets the core criteria, a TCO is issued, reducing the duty rate for the specified goods. The TCO does not affect existing rights or impose liabilities on persons for actions taken prior to the order's registration, but it does entitle importers to apply for a refund of duty on goods imported since the date the TCO is deemed to have come into force. This instrument applies nationally across Australia and is not restricted by state or territory boundaries.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) that are relevant to the Tariff Concession Instrument No. 0902636 include section 269F (2), which outlines the process for applying for a Tariff Concession Order (TCO) with the Chief Executive Officer of Customs (the CEO). Section 269C specifies the core criteria that a TCO application must meet, and section 269P(3) details the CEO's obligation to make a written order if the application meets these criteria. Additionally, section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions from the public on the proposed TCO. The Tariff Concession Instrument No. 0902636, which was made on 17 April 2009, declares that certain plc control units are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, with the rate of duty for these goods being free.
The Act imposes several obligations on the parties involved. Firstly, section 269F(2) requires that an applicant must apply to the CEO for a TCO in respect of goods. The CEO, as per section 269C, must then determine if the application meets the core criteria, which includes ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, section 269P(3) mandates that the CEO must make a written TCO. Section 269K(1) further requires the CEO to publish a notice in the Gazette, inviting 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 for TCO No. 0902636.
The Act provides for specific consequences in the event of non-compliance. Although the explanatory statement does not detail any specific offences or penalties associated with breaching the requirements of a TCO, the broader Customs Act 1901 and the Customs Regulations 1993 include provisions for penalties for non-compliance with customs laws. For example, section 235A of the Customs Act 1901 imposes penalties for providing false or misleading information in connection with a customs matter. Similarly, section 221 of the Customs Regulations 1993 specifies penalties for breaches of customs laws, which could include fines and imprisonment. The TCO itself does not impose any liabilities on any person and does not affect the rights of a person (other than the Commonwealth) as at the date of registration. However, the rights of importers will be beneficially affected, and they will be able to apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations.