EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0907329
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.
Robbins Industrial Services applied for a TCO in respect of certain jet fire blankets on 03 March 2009.
Instrument
TCO No 0907329 was made on 22 May 2009. It declares that those certain jet fire blankets 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. 0907329 is taken to have come into force on 03 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 enacted to provide for the administration of customs and excise duties in Australia, including the imposition and collection of such duties. The Customs Act 1901 was introduced to address the need for a comprehensive legislative framework governing the collection and management of customs duties, aiming to facilitate international trade while ensuring revenue collection for the Commonwealth. The Act was enacted by the Australian Parliament and serves to provide the legal basis for the regulation of imports and exports, ensuring that duties are correctly applied and collected. The policy objective behind the Act is to enable the efficient administration of customs and excise duties while supporting the regulation of trade to protect domestic industries and consumers.
The Tariff Concession Instrument No. 0907329, issued under the Customs Act 1901, was introduced to address a specific gap in the duty regime for certain jet fire blankets by Robbins Industrial Services. The instrument allows for a tariff concession, effectively reducing the customs duty on these goods from the general rate of 5% to free. This measure was taken after it was determined that no substitutable goods were produced in Australia, aligning with the criteria set out in the Customs Act 1901. The instrument, which came into effect on the date the application was lodged, ensures that the rights of importers are positively impacted by allowing them to apply for a refund of duty on goods imported since the concession came into force.
Scope and Application
The Tariff Concession Instrument No. 0907329, made under the Customs Act 1901, applies to the specific goods in respect of which Robbins Industrial Services applied for a tariff concession order (TCO). The Act authorises the Chief Executive Officer of Customs (CEO) to make such orders, which result in a lower rate of customs duty for the specified goods, if certain criteria are met. In this case, the CEO determined that the application for the jet fire blankets met the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business. The TCO, effective from 3 March 2009, grants a tariff concession, setting the duty rate for these goods to free, down from the general rate of 5%. The instrument's reach is limited to the particular goods specified in the application and does not extend to any other goods or entities unless similarly applied for and approved. The TCO does not affect any pre-existing rights or liabilities incurred before its effective date, and importers of the affected goods can apply for duty refunds for imports since that date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0907329 (F2009L03290) concern the application and establishment of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901 (section 269C). Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. If the CEO determines that the application meets the core criteria, which include that no substitutable goods were produced in Australia on the day the application was lodged, a TCO can be issued (section 269P(3)). This instrument, TCO No. 0907329, specifically declares that certain jet fire blankets are subject to a zero rate of customs duty, as opposed to the general rate of 5% (section 269P(3)).
The Act imposes specific obligations on the parties involved. For instance, the CEO is required to ensure that the application for a TCO does not pertain to goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The CEO must also publish a notice in the Gazette, inviting any person who might have reasons to oppose the TCO to lodge a submission (subsection 269K(1)). The CEO is mandated to consider these submissions and make a decision based on whether the application meets the core criteria set out in the Act.
There are no specific offences or penalties outlined in this legislation for the breach of the TCO provisions. However, the Act does provide for civil and criminal consequences in other sections related to customs duties and tariff concessions. For example, under the Customs Act 1901, offences related to the underpayment of duty or incorrect declarations can attract significant penalties, including fines and imprisonment. The specific penalties depend on the nature and severity of the breach, with maximum penalties available under the relevant sections of the Act and associated regulations.
The Tariff Concession Instrument No. 0907329 is effective from the date the application was lodged, which is 03 March 2009. Importantly, it does not retroactively affect the rights of any person, including the rights of importers, who may now benefit from the tariff concession and apply for refunds on duty paid on the goods imported since the effective date of the TCO. The rights of any person, other than the Commonwealth, are protected from any disadvantage or liability for actions taken before the TCO was registered.