EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0903050
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.
Esso Australia applied for a TCO in respect of certain subsea coolers on 30 January 2009.
Instrument
TCO No 0903050 was made on 24 April 2009. It declares that those certain subsea coolers 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. 0903050 is taken to have come into force on 30 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, established a framework for managing customs duties and trade regulations. One significant aspect of this Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which was introduced to address the need for reducing customs duties on specific goods where no suitable Australian-produced alternatives exist. This mechanism enables the Chief Executive Officer of Customs to grant tariff concessions, thereby lowering the customs duty on certain imported goods to zero if no substitutable goods are produced domestically. The process of applying for and granting TCOs aims to support industries by making imported goods more competitively priced, ultimately benefiting both businesses and consumers. The policy objective is to facilitate trade and economic growth by ensuring that Australian businesses can access necessary imported goods at reduced costs, provided that there are no viable domestic alternatives.
Scope and Application
The Tariff Concession Instrument No. 0903050 applies to individuals or entities seeking tariff concessions on specific goods as outlined in the Customs Act 1901. This Act pertains to the regulation of customs duties and operates under the Commonwealth jurisdiction. The instrument specifically applies to subsea coolers, which are the subject of the application by Esso Australia, and it comes into effect from the date of application, which is 30 January 2009. The geographic scope is national, as it concerns goods entering Australia and their respective duties. The instrument ensures that no substitutable goods were produced in Australia, thereby meeting the core criteria for a tariff concession order. The Customs Act provides the framework within which the Chief Executive Officer of Customs can make such decisions, and the instrument itself does not disadvantage any person or impose liabilities on anyone except the Commonwealth. The instrument is an extension of the Act, clarifying the application of tariff concessions in specific cases as per the statutory provisions.
Key Provisions
The main provisions of this Tariff Concession Instrument No. 0903050 under the Customs Act 1901 are centred around the application and grant of Tariff Concession Orders (TCOs). Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. The CEO must then determine whether the application meets the core criteria set out in section 269C, which is primarily concerned with ensuring that no substitutable goods are being produced in Australia in the ordinary course of business at the time the application is lodged. If the application meets these criteria, the CEO is required by section 269P(3) to issue a TCO that specifies the goods and the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that will apply, thereby providing a lower rate of customs duty on the goods.
Entities and individuals subject to the Act must comply with the application process and criteria outlined in the Customs Act 1901. They must ensure that their applications for a TCO are made in good faith and that the goods in question meet the specified conditions, particularly the absence of substitutable goods produced in Australia. Additionally, section 269K(1) imposes an obligation on the CEO to publish a notice in the Gazette inviting submissions from any interested parties who might have reasons to oppose the granting of a TCO. This transparency requirement ensures that all stakeholders have an opportunity to be heard before a TCO is issued.
Failure to comply with the requirements of the Customs Act 1901 or providing misleading information in a TCO application could lead to various consequences. While specific offences and penalties are not detailed in the explanatory statement, general provisions within the Customs Act 1901 may apply. These could include fines or imprisonment for knowingly providing false or misleading information, which is a common penalty for breaches of customs legislation. The Act also provides for civil and criminal penalties for non-compliance with its provisions, although the exact nature and maximum penalties would need to be referred to within the broader context of the Act and associated regulations. The instrument itself does not impose any liabilities on any person other than the Commonwealth, and it does not affect the rights of any person as at the date of registration, thereby ensuring that it does not disadvantage or impose liabilities on anyone for actions taken prior to its implementation.