EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0909961
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.
Downer Edi Rail Pty Ltd applied for a TCO in respect of certain filter inductors reactors on 25 March 2009.
Instrument
TCO No 0909961 was made on 12 June 2009. It declares that those certain filter inductors reactors 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. 0909961 is taken to have come into force on 25 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. 0909961, enacted under the Customs Act 1901, addresses the problem of ensuring that certain goods not produced in Australia are granted tariff concessions to facilitate their import. This legislative instrument allows the Chief Executive Officer of Customs to reduce or eliminate customs duties on specified goods, promoting trade and economic efficiency. The Tariff Concession Order (TCO) No. 0909961, made on 12 June 2009, applies to certain filter inductors reactors, reducing their duty from 5% to free, in recognition that no substitutable goods are produced in Australia. This measure ensures that the rights of importers are beneficially affected, with no retroactive liabilities imposed on any person.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0909961, applies to individuals or entities seeking tariff concessions on specific goods imported into Australia. The Act authorises the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower the customs duty on goods that are not substitutable with any goods produced in Australia in the ordinary course of business. The application of the Act is nationwide, covering the entire Commonwealth of Australia. It is pertinent to note that the Act does not apply to goods specified in section 269SJ, which lists items ineligible for tariff concessions. The instrument also extends its application through subordinate regulations, which provide further detail on the administration and enforcement of the Act.
This particular instrument, TCO No. 0909961, was issued on 12 June 2009 and pertains to certain filter inductors reactors, declaring them subject to a zero-rate duty as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The Act ensures that the concession does not retroactively disadvantage any party, thereby safeguarding the rights of importers who can now apply for a refund of duty on goods imported since the TCO's effective date of 25 March 2009. The Act, through this instrument, aims to provide relief to importers of the specified goods without imposing new liabilities on any person.
Key Provisions
The Tariff Concession Order (TCO) No. 0909961, made under the Customs Act 1901, provides a concession on customs duties for certain filter inductors reactors. This order, which came into effect on 25 March 2009, declares that these specific goods will be subject to a zero rate of customs duty, as opposed to the general rate of 5% (sections 269P(3) and 269S(1)). This concession applies because no substitutable goods were produced in Australia at the time the application was lodged (section 269C). The CEO of Customs was satisfied that the application met the core criteria and, therefore, issued the written order (section 269F).
The Act imposes several obligations on the parties involved. Firstly, any person who wishes to apply for a TCO must ensure their application complies with the core criteria specified in section 269C of the Act. If the CEO is satisfied that the application meets these criteria, the CEO must proceed to make the TCO (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties once the application is accepted as valid (subsection 269K(1)). In this instance, no submissions were received, and therefore, the TCO was issued without any objections.
Failure to comply with the requirements of the Act may result in various consequences. While the explanatory statement does not explicitly detail the penalties for non-compliance with the TCO provisions, it is reasonable to infer that breaches of the Act may lead to penalties as outlined in other sections of the Customs Act 1901 or associated regulations. Typically, such breaches could result in fines, imprisonment, or other legal actions as deemed appropriate by the courts. Importers who benefit from the TCO may also be subject to scrutiny to ensure they are eligible for the duty concession, and any misuse of the concession could result in further penalties.