EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0905205
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.
Rio Tinto Aluminium applied for a TCO in respect of certain insulation blankets or pads on 18 February 2009.
Instrument
TCO No 0905205 was made on 15 May 2009. It declares that those certain insulation blankets or pads 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. 0905205 is taken to have come into force on 18 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 the legal framework for the administration of customs duties and includes a scheme for Tariff Concession Orders (TCOs). These orders, which can be made by the Chief Executive Officer of Customs, provide a lower rate of customs duty on certain goods. The Tariff Concession Instrument No. 0905205, made on 15 May 2009, applies to certain insulation blankets or pads by declaring them to be subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, rather than the general rate of 5%. The instrument was introduced to address the specific needs of Rio Tinto Aluminium, who applied for the concession on 18 February 2009, and was effective from that date. The policy objective is to ensure that the CEO considers applications for tariff concessions in a transparent manner and provides an opportunity for public submissions, although in this instance, no objections were received. The instrument does not disadvantage any person or impose liabilities for actions taken prior to its registration.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). This Act applies to any person or entity seeking to import goods into Australia that may qualify for a tariff concession. The application process requires the CEO to assess whether the goods in question meet the core criteria set out in the Act, particularly focusing on whether there are any substitutable goods produced in Australia in the ordinary course of business. If the CEO determines that no substitutable goods are produced in Australia, a TCO can be issued, granting the specified goods a lower rate of customs duty. This order is made effective from the date the application is lodged, though it does not retroactively disadvantage any person or impose liabilities for actions prior to its registration. The geographic scope of this legislation is national, impacting all imports into Australia. Notably, the Act excludes certain goods from being subject to a TCO, as outlined in section 269SJ. The application of the Act can be extended or modified through subordinate instruments, which may further define terms or criteria used in the application process.
Key Provisions
The key sections of the Tariff Concession Instrument No. 0905205 under the Customs Act 1901 include sections 269C, 269F, and 269P, which govern the process of applying for and making Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, they must make a written order (TCO) as specified in section 269P(3). Section 269C sets out the core criteria that must be met, which primarily involves ensuring that no substitutable goods are produced in Australia on the day the application was lodged.
The Act imposes several obligations on the parties involved in the process. The CEO must ensure that any TCO application is assessed against the core criteria, specifically checking whether substitutable goods are produced in Australia. If the CEO is satisfied that the application meets the criteria, they must make a written TCO. The applicant, such as Rio Tinto Aluminium in this case, must provide sufficient evidence to demonstrate that the goods in question meet the requirements for a TCO. Additionally, once a TCO application is accepted as valid, the CEO is required under section 269K(1) to publish a notice in the Gazette inviting any interested parties to submit objections.
Failure to comply with the requirements of the Act may result in various consequences. If an entity provides false information in a TCO application, they could be subject to civil or criminal penalties. Under the Customs Act, making a false statement in a document submitted to the CEO can lead to penalties, including fines and imprisonment. The specific penalties for such offences are detailed in other sections of the Customs Act, but they can include significant fines and terms of imprisonment depending on the severity of the offence. Additionally, any person who contravenes a TCO may also face penalties, including fines or imprisonment as determined by the court.