EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0906066
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.
Moffat Pty Ltd applied for a TCO in respect of certain blast chillers on 20 February 2009.
Instrument
TCO No 0906066 was made on 15 May 2009. It declares that those certain blast chillers 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. 0906066 is taken to have come into force on 20 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. 0906066 was enacted in 2009 under the Customs Act 1901, addressing the need for tariff concessions on specific imported goods. This legislative instrument allows the Chief Executive Officer of Customs to apply a lower rate of customs duty on certain goods through Tariff Concession Orders (TCOs). The policy objective is to ensure that the tariff concessions are granted when there are no substitutable goods produced in Australia, thereby protecting domestic industries while providing economic benefits to importers. The process involves applications being made to the CEO, who must assess whether the application meets the core criteria outlined in the Act, including the absence of substitutable goods produced in Australia. Upon meeting these criteria, the CEO issues a TCO, which applies a reduced duty rate to the specified goods. This instrument is designed to maintain a balance between supporting Australian industries and facilitating trade by reducing the cost of importing certain goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) which can reduce customs duty on certain goods. These orders apply to entities and individuals who import goods that meet the criteria specified in a TCO, thereby providing them with a lower rate of customs duty. The Act operates within the Commonwealth jurisdiction, affecting the importation of goods into Australia. The scope of the Act extends to all entities and individuals engaged in the importation of goods that can be the subject of a TCO, provided that the goods do not fall under the prohibited categories outlined in section 269SJ of the Act. The Act allows for its application to be further defined or modified through subordinate instruments, such as regulations, which can specify additional criteria or conditions for the application of TCOs. Importantly, the Act ensures that the implementation of a TCO does not adversely affect the rights of any person in relation to actions taken before the TCO's effective date, nor does it impose new liabilities on any person as a result of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0906066, made under the Customs Act 1901, concern the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to reduce the rate of customs duty on specific goods. Section 269F allows a person to apply for a TCO, while Section 269C specifies the core criteria that the CEO must consider. If the CEO is satisfied that the application meets these criteria, they must make a TCO (Section 269P(3)). The instrument declares that certain blast chillers, as applied for by Moffat Pty Ltd, are subject to a free rate of duty, as no substitutable goods were produced in Australia at the time of the application (Section 269C). The TCO was made on 15 May 2009, and it applies to the goods from the date of the application, 20 February 2009 (Section 269S(1)).
The Act imposes several obligations on the parties involved. Firstly, the CEO must assess whether the TCO application meets the core criteria outlined in Section 269C. This includes verifying that no substitutable goods were produced in Australia on the day the application was lodged. Secondly, upon accepting the application, the CEO must publish a notice in the Gazette inviting any interested party to lodge submissions if they believe the TCO should not be made (Section 269K(1)). This ensures transparency and provides an opportunity for objections. Additionally, the CEO must ensure that the TCO does not adversely affect the rights of any person other than the Commonwealth and does not impose any liabilities for actions taken before the TCO registration date (Section 269S(1)).
In terms of offences, penalties, and consequences for breach, the Customs Act 1901 does not specify criminal offences directly related to the failure to comply with a TCO. However, general provisions under the Customs Act may apply for non-compliance with customs regulations, which could lead to civil or criminal penalties. The maximum penalties for breaches of the Customs Act can include fines and imprisonment. For example, knowingly making a false statement or providing misleading information could result in fines of up to $22,200 or imprisonment for up to two years, or both (Section 228). Additionally, failure to comply with the TCO could lead to financial penalties, such as being liable for the full customs duty on the goods concerned, along with interest and any applicable fines.
The instrument ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force (Regulation 126(1)(r)). This provides a clear financial incentive for compliance and encourages importers to adhere to the terms of the TCO. Furthermore, by not imposing any liabilities on any person other than the Commonwealth, the Act aims to protect individuals and entities from unforeseen financial burdens stemming from the TCO's implementation.