EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908361
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.
Rio Tinto Aluminum Limited applied for a TCO in respect of certain noise attentuator slated panel spacers on 12 March 2009.
Instrument
TCO No 0908361 was made on 29 May 2009. It declares that those certain noise attentuator slated panel spacers 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. 0908361 is taken to have come into force on 12 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 by the Parliament of Australia to facilitate international trade by regulating the import and export of goods. This legislation addresses the need for a structured approach to customs duties and related activities. One specific tool within the Customs Act is the ability to create Tariff Concession Orders (TCOs), which allow for reduced customs duty rates on certain goods. The Act aims to ensure that such tariff concessions are granted judiciously, particularly when no suitable domestic alternatives exist. The Chief Executive Officer of Customs has the authority to make these orders, subject to meeting specific criteria such as the absence of substitutable goods produced in Australia. This process helps in promoting fair trade practices while also considering the economic implications for both the government and the industry. The introduction of TCOs such as Instrument TCO No. 0908361, which applies to certain noise attenuator slated panel spacers, exemplifies the Act's objective to streamline customs procedures and support specific sectors of the economy by reducing their import costs.
Scope and Application
The Customs Act 1901, as extended by Tariff Concession Instrument No. 0908361, pertains to the application and approval of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This instrument applies to entities and individuals, particularly importers, who seek a reduction in customs duty on specific goods by applying for a TCO. The geographic and jurisdictional reach of this Act is national, as it is governed by Commonwealth law. The Act allows for the exclusion of certain goods from TCO consideration, as specified in section 269SJ. A TCO can be issued if the CEO determines that no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D of the Act. The application process requires publication in the Gazette to invite submissions from interested parties, although no submissions were received in this instance. The TCO comes into effect on the date the application is lodged, and it does not retroactively affect the rights or liabilities of persons other than the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0908361 are sections 269C, 269F, 269P, and 269S of the Customs Act 1901 (the Act). Section 269F (3) allows an individual to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) regarding certain goods, subject to certain criteria. Section 269C stipulates that a TCO will be issued if the CEO is satisfied that no substitutable goods are produced in Australia on the day the application is lodged. Section 269P mandates that if the CEO is satisfied that an application meets the core criteria, a written TCO must be issued. Finally, Section 269S states that a TCO is effective from the date the application is lodged, and does not disadvantage any person other than the Commonwealth.
Under the Act, the CEO has the obligation to review any TCO application and determine whether the application meets the core criteria set out in section 269C. If the CEO is satisfied that the application meets the criteria, they must issue a TCO. The CEO is also required to publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). In this case, the CEO did not receive any submissions in response to the invitation.
Failure to comply with the requirements of the Act and the TCO may result in civil or criminal consequences. Specifically, any person who contravenes a provision of the Act or a TCO may be liable to a penalty of up to $22,200 for an individual or $111,000 for a body corporate (subsection 287(1) of the Act). Additionally, any person who knowingly or recklessly makes a false or misleading statement in an application for a TCO may be liable to a penalty of up to $22,200 for an individual or $111,000 for a body corporate (subsection 289(1) of the Act). The maximum penalties are higher if the offence is committed by a body corporate.
In summary, the Tariff Concession Instrument No. 0908361 provides for a lower rate of customs duty on certain noise attenuator slated panel spacers, subject to certain criteria being met. The CEO has the obligation to review any TCO application and determine whether it meets the core criteria. Failure to comply with the requirements of the Act or a TCO may result in civil or criminal consequences, including penalties of up to $22,200 for an individual or $111,000 for a body corporate.