EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0907148
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.
Dux Manufacturing applied for a TCO in respect of certain anodes on 02 March 2009.
Instrument
TCO No 0907148 was made on 22 May 2009. It declares that those certain anodes 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. 0907148 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, enacted by the Commonwealth Parliament, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These orders provide for reduced customs duty rates on specified goods, provided they meet certain criteria. The Tariff Concession Instrument No. 0907148 was introduced on 22 May 2009 to address the specific need for a tariff concession for certain anodes, following an application by Dux Manufacturing on 2 March 2009. The policy objective of this instrument was to ensure that no substitutable goods were produced in Australia, thereby justifying the concession. This instrument was published in the Gazette with no submissions received, and it came into force on the date of the application, 2 March 2009, with no retroactive effect on the rights or liabilities of parties other than the Commonwealth. Importers, however, stand to benefit from this concession through potential duty refunds.
Scope and Application
The Tariff Concession Instrument No. 0907148, made under the Customs Act 1901, applies to the goods specified in the Instrument, namely certain anodes, and the entities or persons importing or exporting these goods. The Act facilitates tariff concessions for goods that are not produced in Australia in the ordinary course of business, as determined by the Chief Executive Officer of Customs. The geographic scope of the Act extends nationally as it is a Commonwealth Act, impacting all states and territories within Australia. The Act provides for the application of a lower rate of customs duty to the specified goods, contingent on meeting the core criteria outlined in the Act. Any person, including Dux Manufacturing in this case, may apply for a Tariff Concession Order, subject to the conditions set forth in the Act, particularly those in section 269SJ which excludes certain goods from eligibility for a tariff concession. The CEO’s decision to grant or refuse a TCO is final, and the Instrument is effective from the date the application was lodged, 2 March 2009, without retroactive effect on past transactions.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0907148 under the Customs Act 1901 (section 269P(3)) establish the conditions under which the Chief Executive Officer of Customs (CEO) can make a Tariff Concession Order (TCO). Section 269C outlines the core criteria for a TCO, which must be met for the CEO to consider the application. If the CEO determines that no substitutable goods are produced in Australia and the application meets the criteria, a TCO will be issued (section 269P(3)). The instrument itself (section 269S(1)) specifies that the TCO takes effect from the date the application was lodged, which in this case was 2 March 2009.
The Act imposes specific obligations on both the CEO and applicants. The CEO must review TCO applications to ensure they comply with the core criteria, which includes verifying that no substitutable goods are produced in Australia (section 269C). If the application meets these criteria, the CEO must issue a TCO (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). Applicants must submit detailed information about the goods in question and justify why a TCO should be granted (section 269P(2)).
Failure to comply with the provisions of the Customs Act 1901 can result in various penalties and consequences. For instance, any person who submits false or misleading information in an application for a TCO could face criminal charges under section 288 of the Act, which carries a maximum penalty of 10,000 penalty units or imprisonment for five years, or both. Additionally, under section 289 of the Act, any person who knowingly makes a false statement in a document required by the Act can be subject to a penalty of 5,000 penalty units or imprisonment for one year, or both. These penalties underscore the importance of accurate and truthful information in the application process.