EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0907332
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.
Linatex Australia applied for a TCO in respect of certain diamond muff couplings on 03 March 2009.
Instrument
TCO No 0907332 was made on 22 May 2009. It declares that those certain diamond muff couplings 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. 0907332 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 Tariff Concession Instrument No. 0907332 was enacted under the Customs Act 1901 to provide a lower rate of customs duty on certain diamond muff couplings. This instrument was introduced to address the gap in tariff concessions for specific goods not produced in Australia, thereby encouraging their importation. The Chief Executive Officer of Customs made this decision following an application from Linatex Australia, which demonstrated that no substitutable goods were produced domestically. The policy objective, as outlined in the explanatory statement, is to facilitate the importation of goods that are not locally produced, thereby potentially benefiting importers who can now apply for duty refunds on goods imported since the tariff concession took effect on 3 March 2009. The instrument ensures that no existing rights or liabilities of persons other than the Commonwealth are adversely affected by this concession.
Scope and Application
The Tariff Concession Instrument No. 0907332 applies to the goods specified in the instrument, namely certain diamond muff couplings, and is issued under the Customs Act 1901. The Act authorises the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods that meet certain criteria, such as there being no substitutable goods produced in Australia. In this case, the instrument was made on 22 May 2009 following an application by Linatex Australia on 03 March 2009. The TCO applies to the named goods and reduces the rate of duty on these goods from 5% to free. The application of the TCO is subject to certain conditions, such as the goods being imported and the application for the TCO being lodged on or after the date the TCO is taken to have come into force. The instrument does not affect the rights of any person except to the extent of conferring a benefit on the rights of importers, who can apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force.
Key Provisions
The main operative sections of this legislation are sections 269C, 269P(3), 269K(1), and 269S(1) of the Customs Act 1901, as well as the instrument TCO No. 0907332. Section 269C establishes the core criteria that must be met for a Tariff Concession Order (TCO) application to be approved, which requires that no substitutable goods are produced in Australia on the day the application is lodged. Section 269P(3) mandates that if the application meets these criteria, the Chief Executive Officer of Customs (CEO) must make a written order, or TCO, declaring the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting any person to submit objections to the TCO application. Section 269S(1) specifies that a TCO is taken to have come into force on the day the application was lodged. Instrument TCO No. 0907332 declares that certain diamond muff couplings are subject to a TCO, with a duty rate of free, instead of the general rate of 5%.
The Customs Act 1901 imposes specific obligations on parties or entities it governs. For example, the CEO must ensure that applications for TCOs meet the core criteria outlined in section 269C, and must make a written TCO if the criteria are satisfied. The CEO also has the responsibility under section 269K(1) to publish a notice in the Gazette inviting objections to a TCO application, and to consider any submissions received in response to this notice. The Act further stipulates that the rights of persons, other than the Commonwealth, as at the date of registration of a TCO will not be adversely affected, and that no liabilities will be imposed on any person in respect of anything done or omitted before the date of registration.
In terms of consequences for non-compliance, the Customs Act 1901 does not explicitly outline specific offences, penalties, or consequences for breach of the Act in this context. However, failure to comply with the Act's provisions, such as submitting a TCO application that does not meet the core criteria, could result in the application being rejected by the CEO. Additionally, any person who believes that a TCO should not be made has the right to lodge a submission with the CEO, and the CEO is required to consider these submissions. The Act ensures that the rights of individuals and entities, other than the Commonwealth, are not adversely affected by the implementation of a TCO, and that no liabilities are imposed on any person in relation to actions taken before the registration of a TCO.