EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0903559
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.
Process Group applied for a TCO in respect of certain coalescer filters on 03 February 2009.
Instrument
TCO No 0903559 was made on 01 May 2009. It declares that those certain coalescer filters 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. 0903559 is taken to have come into force on 03 February 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 Tariff Concession Instrument No. 0903559 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific goods that are not produced in Australia. This legislation was introduced to facilitate the application process for Tariff Concession Orders (TCOs) by allowing the Chief Executive Officer of Customs to grant tariff concessions to importers of goods for which no substitutable Australian-made products exist. The primary objective of this instrument is to support the importation of certain goods by providing a lower rate of customs duty, thereby encouraging trade and benefiting importers without disadvantaging existing rights or imposing new liabilities on individuals. The instrument came into effect on 3 February 2009, following the application by Process Group for tariff concessions on certain coalescer filters, and was subsequently approved by the CEO of Customs.
Scope and Application
The Tariff Concession Instrument No. 0903559, which is governed by the Customs Act 1901, applies to specific goods in respect of which a Tariff Concession Order (TCO) has been granted. This legislation enables the Chief Executive Officer of Customs to issue a TCO, thereby applying a lower rate of customs duty to the goods specified in the order. The Act is applicable to individuals or entities that have applied for and been granted a TCO for particular goods that are not produced in Australia and have no substitutable goods produced domestically. The geographic reach of this Act is national, as it pertains to customs duties under Australian law. The application of this Act is not restricted by geographic boundaries within Australia but is limited to goods subject to the TCO scheme. The Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which are ineligible for a TCO. The Act allows for further definition and application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty applicable to the goods under the TCO.
Key Provisions
The main operative sections of this legislation revolve around the ability for the Chief Executive Officer of Customs (CEO) to grant Tariff Concession Orders (TCO) under section 269C of the Customs Act 1901 (the Act). This process allows for a lower rate of customs duty on certain goods, provided the application meets the core criteria (subsection 269P(3)). The CEO must first determine that no substitutable goods are produced in Australia and that the application does not pertain to goods specified in section 269SJ, which cannot be subject to a TCO. Once these conditions are met, the CEO must make a written order declaring the goods subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff), effectively reducing the duty rate.
The Act imposes several obligations on parties and entities governed by it. Firstly, any person who wishes to apply for a TCO must do so under section 269F, ensuring the application is not in respect of goods specified in section 269SJ. The CEO is required to publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). The CEO must also ensure that no substitutable goods are produced in Australia, as per section 269C, before making a TCO. Additionally, the CEO must declare the specific tariff item under Schedule 4 of the Tariff that applies to the goods, as stipulated in subsection 269P(3).
There are no explicit offences, penalties, or civil/criminal consequences mentioned in the explanatory statement for breaches of the Tariff Concession Instrument. However, the Act does provide for potential consequences under the general legal framework. For instance, any failure to comply with the terms of a TCO could potentially result in the re-imposition of the original customs duty rates or other related penalties under the Customs Act 1901. The specific penalties for non-compliance would depend on the particular breach and could include fines or other administrative actions as prescribed by the relevant laws.