EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0904187
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 dredging pumps on 09 February 2009.
Instrument
TCO No 0904187 was made on 01 May 2009. It declares that those certain dredging pumps 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. 0904187 is taken to have come into force on 09 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the regulation of customs and excise through the administration of tariffs and duties. Specifically, Part XVA of the Act enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that grant lower rates of customs duty on specified goods. The Tariff Concession Instrument No. 0904187 was introduced to address the need for tariff concessions on certain dredging pumps, as applied for by Baulderstone Hornibrook. The instrument was enacted to ensure that these goods, which have no substitutable products produced in Australia, receive duty-free treatment under the Customs Tariff Act 1995, thereby promoting competitive and fair market practices. The policy objective aligns with facilitating smoother import processes and providing economic benefits to importers by allowing them to apply for duty refunds on goods imported since the TCO came into effect on 09 February 2009.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that reduce the customs duty on specific goods, provided certain criteria are met. This Act applies to any person or entity that seeks to import goods into Australia, provided these goods are not specified in section 269SJ of the Act as those that cannot be subject to a TCO. The Act applies across Australia, encompassing both state and territory jurisdictions. The application process involves meeting core criteria set out in the Act, such as ensuring no substitutable goods are produced in Australia at the time of application. The issuance of a TCO, such as TCO No. 0904187, is retroactive to the date the application was lodged, meaning it takes effect from that date, and it does not impose any liabilities or disadvantage any person other than the Commonwealth. The TCO, once in effect, allows for a refund of duty on the eligible goods, benefiting importers. The application of the Act may be further defined or restricted through subordinate instruments issued under its authority.
Key Provisions
The Tariff Concession Instrument No. 0904187, made under the Customs Act 1901, provides significant benefits in terms of tariff concessions for specific goods, in this case, dredging pumps. According to section 269F, any person may apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). The CEO must then determine if the application meets the core criteria outlined in sections 269C, 269D, 269E, and 269P(3). If these criteria are satisfied, the CEO must issue a written TCO. For instance, Bauderstone Hornibrook successfully applied for a TCO for certain dredging pumps on 09 February 2009, and the CEO issued TCO No. 0904187 on 01 May 2009, declaring that these dredging pumps are subject to a free rate of duty under item 50 of Schedule 4 to the Tariff, instead of the general rate of 5%.
The obligations under this Act are quite specific. The CEO must ensure that the application does not pertain to goods that are explicitly excluded by section 269SJ. Furthermore, the CEO is mandated by section 269K(1) to publish a notice in the Gazette, inviting submissions from any interested parties who may have reasons to oppose the TCO. In this case, no submissions were received by the CEO, which facilitated the smooth issuance of the TCO.
Should there be any breaches of the provisions under this Act, the consequences can be significant. While the Explanatory Statement does not detail specific offences or penalties, it is evident that the Act imposes stringent requirements to ensure the proper application of tariff concessions. The failure to adhere to these requirements could potentially lead to legal challenges or the invalidation of the TCO, which in turn might affect the rights and liabilities of the involved parties. The Act ensures that the rights of importers will be beneficially affected, and any existing liabilities are protected, provided that they relate to actions taken before the TCO's effective date.