EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0907081
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.
Rehau Pty Ltd applied for a TCO in respect of certain compression tools on 02 March 2009.
Instrument
TCO No 0907081 was made on 22 May 2009. It declares that those certain compression tools 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. 0907081 is taken to have come into force on 02 March 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 was amended to include a scheme for Tariff Concession Orders (TCOs) through Part XVA, enacted to address the need for reduced customs duty rates for certain goods not produced domestically. This legislative framework allows the Chief Executive Officer of Customs to consider applications for tariff concessions on the basis that the goods in question are not produced in Australia and there are no substitutable goods available domestically. The Tariff Concession Instrument No. 0907081, enacted on 22 May 2009, exemplifies this process, granting tariff concessions to Rehau Pty Ltd for specific compression tools. This legislative intervention ensures that the rights of importers are positively affected, allowing them to seek refunds for duties paid on these goods since the effective date of the concession, 2 March 2009, without imposing new liabilities on any party.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to entities and individuals seeking a reduction in customs duty on specific goods through a TCO, provided that such goods are not excluded under section 269SJ and meet the criteria set out in section 269C. The application process necessitates that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. Once the CEO is satisfied that an application meets these criteria, a TCO is issued under section 269P(3), which can significantly reduce the customs duty rates applicable to the specified goods, as evidenced by Tariff Concession Instrument No. 0907081. This instrument, which came into effect on 2 March 2009, applies Commonwealth-wide and does not retroactively affect the rights of any party other than the Commonwealth, ensuring that the rights of importers are positively impacted from the date of registration.
Key Provisions
The key operative sections of this legislation revolve around the Customs Act 1901, particularly sections 269C, 269F, and 269P (subsection 269P(3)). Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO), while Section 269C sets the core criteria that an application must meet, specifically that no substitutable goods were produced in Australia on the day the application was lodged. Upon meeting these criteria, Section 269P(3) mandates that the CEO must issue a written TCO order, specifying that the goods in question are subject to a prescribed rate in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by this Act on the relevant parties are primarily centred around the application and review process for a TCO. For applicants, such as Rehau Pty Ltd in this case, the obligation is to ensure that their application meets the core criteria, specifically demonstrating that no substitutable goods were produced in Australia. For the CEO, the obligations include reviewing the application, making a determination on whether the application meets the core criteria, and if so, issuing a written TCO order. Additionally, the CEO must publish a notice in the Gazette inviting submissions on the application, although no submissions were received in this case.
Breaching the provisions of this legislation can result in civil or criminal consequences. While the specific offences and penalties are not detailed in the explanatory statement, the general legal framework under the Customs Act 1901 would typically apply. This might include penalties for misrepresentation, fraud, or non-compliance with customs regulations, which can vary widely depending on the severity and nature of the breach. For instance, under Section 240 of the Customs Act, penalties can include fines and imprisonment for serious offences, although the exact penalties are not specified in this particular explanatory statement.