EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902741
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.
Pro Quip International applied for a TCO in respect of certain jerry cans on 28 January 2009.
Instrument
TCO No 0902741 was made on 19 June 2009. It declares that those certain jerry cans 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. 0902741 is taken to have come into force on 28 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, facilitates a scheme whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs to lower the rate of customs duty on specific goods. This legislative framework was introduced to address the problem of ensuring that certain imported goods do not unfairly compete with goods that could potentially be produced domestically, by allowing duty-free importation when no substitutable goods are produced in Australia. The policy objective is to encourage the production of goods within Australia by preventing the importation of similar products at a lower cost. Pursuant to this, Tariff Concession Instrument No. 0902741 was issued on 19 June 2009, in response to an application by Pro Quip International for a TCO on specific jerry cans, recognising that no substitutable goods were being produced in Australia at the time of the application. The implementation of this instrument ensures that the rights of importers are positively affected, allowing them to apply for refunds of duty paid on the specified goods since the TCO's effective date of 28 January 2009, without imposing any liabilities on other parties.
Scope and Application
The Customs Act 1901, under Part XVA, governs the application and scope of Tariff Concession Orders (TCOs), which are issued by the Chief Executive Officer of Customs (CEO). These orders provide a lower rate of customs duty for specified goods. An application for a TCO can be made by any person, and if it pertains to goods not excluded under section 269SJ, the CEO evaluates whether the application meets the core criteria, specifically if no substitutable goods are produced in Australia in the ordinary course of business. The application must be assessed against the definitions provided in sections 269C, 269D, 269E, and 269F of the Act. If the criteria are met, the CEO issues a written TCO. The geographic scope of this legislation is national, as it applies across Australia, impacting all importers and the Commonwealth. Exclusions apply to goods listed in section 269SJ, which cannot be subject to a TCO. The commencement of a TCO is effective from the date the application is lodged, and it does not retroactively affect rights or impose liabilities for actions taken before its registration. Any person may submit objections to the CEO regarding a TCO application, although in this instance, no submissions were received.
Key Provisions
The main operative sections of the legislation, specifically under Part XVA of the Customs Act 1901, provide the framework for Tariff Concession Orders (TCOs) which allow for a lower rate of customs duty on certain goods (s 269F). A person can apply for a TCO if certain criteria are met, such as the absence of substitutable goods being produced in Australia at the time of the application (s 269C). The Chief Executive Officer of Customs (CEO) must decide whether the application meets the core criteria, and if satisfied, must make a written order that declares the goods to which the concession applies (s 269P(3)). For instance, TCO No 0902741 pertains to certain jerry cans, applying a free duty rate instead of the general 5% (s 269P(3), item 50 of Schedule 4 to the Tariff).
The obligations imposed by this Act on the parties and entities it governs include the requirement for the CEO to consider applications for TCOs and ensure they meet the specified criteria, including the non-production of substitutable goods in Australia (s 269C). The CEO must also publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made (s 269K(1)). Additionally, the Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the issuance of a TCO (s 269S(1)).
Breach of the provisions outlined in the Customs Act 1901 can result in various consequences. While specific offences and penalties are not detailed within the provided text, it is implied that non-compliance with the Act’s requirements or the terms of a TCO could lead to legal ramifications. Such consequences may include the imposition of duties as per the general rate rather than the concessional rate if the conditions for a TCO are not properly met or if there is fraudulent application for a TCO. Although the exact penalties are not specified in the provided text, they could potentially involve fines or other sanctions under the Customs Act or related legislation.