EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908467
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.
Projex Group applied for a TCO in respect of certain surface preparations on 12 March 2009.
Instrument
TCO No 0908467 was made on 29 May 2009. It declares that those certain surface preparations 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. 0908467 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 Tariff Concession Instrument No. 0908467 was enacted in 2009 under the Customs Act 1901 to address the need for tariff concessions on specific goods, in this instance certain surface preparations, that were not being produced in Australia. This instrument was introduced to facilitate the application process for tariff concessions, ensuring that businesses could benefit from lower customs duties on imported goods that had no Australian equivalent. The instrument was made by the Chief Executive Officer of Customs following an application by Projex Group, and the decision was based on the absence of substitutable goods produced in Australia. The policy objective of this instrument is to support Australian businesses by allowing them to import goods at a lower customs duty rate, thereby fostering competition and economic efficiency. The instrument was published in the Gazette with an invitation for submissions, although none were received, and it came into force on the date the application was lodged.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply to goods that receive a reduced rate of customs duty. An application for a TCO can be made by any person concerning goods not specified in section 269SJ of the Act, which lists goods ineligible for tariff concessions. The core criteria for approval of a TCO application are outlined in sections 269C, 269D, 269E, and 269F of the Act, which require that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must issue a written TCO if these criteria are met, specifying the applicable item of Schedule 4 to the Customs Tariff Act 1995. The TCO is effective from the date the application was lodged, as per subsection 269S(1) of the Act. The instrument TCO No. 0908467, made on 29 May 2009, relates to certain surface preparations and specifies that these goods are subject to item 50 of Schedule 4, with a duty rate of free, down from the general rate of 5%. The TCO does not disadvantage any person or impose liabilities on any person other than the Commonwealth, but importers can benefit by applying for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The primary operative sections of this legislation, specifically the Tariff Concession Order (TCO) No. 0908467, establish a mechanism through which certain goods are granted a lower rate of customs duty under the Customs Act 1901 (section 269F). If the Chief Executive Officer (CEO) of Customs is satisfied that the application for a TCO meets the core criteria outlined in section 269C, they must make a written order declaring that the specified goods are subject to a reduced duty rate as per item 50 of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). This particular TCO, made on 29 May 2009, pertains to certain surface preparations, which now enjoy a duty rate of free instead of the general rate of 5%. This order came into effect on 12 March 2009, the date on which the application was lodged (subsection 269S(1)).
The Act imposes several obligations and requirements on the parties involved. Firstly, any person seeking a TCO must apply to the CEO, who must then determine if the application meets the core criteria, which includes verifying that no substitutable goods are produced in Australia (section 269C). Definitions of key terms such as "substitutable goods" and "ordinary course of business" are provided in sections 269D and 269E respectively. If the CEO determines that the application is valid, they must make a written order (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit objections to the TCO if they believe it should not proceed (subsection 269K(1)). In this instance, no submissions were received.
The legislation also outlines potential consequences for non-compliance. While the explanatory statement does not detail specific offences or penalties, breaches of customs regulations generally may result in civil or criminal penalties. The Customs Act 1901 and the associated regulations could impose fines, imprisonment, or both, depending on the nature and severity of the breach. For example, knowingly making a false statement or representation in a customs document could lead to a fine of up to $22,200 or imprisonment for up to two years, or both, under section 160 of the Act. Additionally, failing to comply with a TCO or any other customs requirement could result in financial penalties or other legal consequences as deemed appropriate by the relevant authorities.