EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910045
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.
Industrial Fittings Sales Pty Ltd applied for a TCO in respect of certain inflators on 25 March 2009.
Instrument
TCO No 0910045 was made on 05 June 2009. It declares that those certain inflators 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. 0910045 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 Customs Act 1901, enacted by the Australian Parliament, includes provisions under Part XVA that establish a framework for Tariff Concession Orders (TCOs). This legislation was introduced to address the need for the Chief Executive Officer of Customs to be able to grant tariff concessions on certain goods where specified criteria are met. Specifically, a TCO allows for a lower rate of customs duty on goods that are not substitutable by goods produced in Australia. Industrial Fittings Sales Pty Ltd applied for a TCO for certain inflators on 25 March 2009, and upon the CEO’s satisfaction that the application met the core criteria, TCO No. 0910045 was issued on 5 June 2009. This order declares that these inflators are subject to a duty rate of free, down from the general rate of 5%, effective from the date of the application. The policy objective of this instrument is to support Australian businesses by reducing the cost of importing specific goods, thereby potentially stimulating trade and economic activity.
Scope and Application
The Tariff Concession Instrument No. 0910045, which is a component of the Customs Act 1901, pertains to the granting of tariff concessions for specific goods, in this case certain inflators, by the Chief Executive Officer of Customs. This Act applies to individuals and entities, specifically those who import or are involved in the importation of the specified goods. The geographic reach of this legislation is national, as it operates under the federal Customs Act 1901, impacting importers across Australia. The Act excludes goods listed in section 269SJ of the Customs Act 1901, which cannot be subject to a tariff concession order. The application of this Act can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which outlines the prescribed items for tariff concessions. The Tariff Concession Order No. 0910045 specifically exempts the certain inflators from the general customs duty of 5%, applying instead a rate of duty of free, effective from the date the application was lodged, 25 March 2009.
Key Provisions
The Tariff Concession Instrument No. 0910045 (the Instrument) under the Customs Act 1901 (the Act) addresses the application for a Tariff Concession Order (TCO) in respect of certain inflators. Section 269F of the Act allows an individual or entity to apply for a TCO, which would result in a lower rate of customs duty for the specified goods. The application was made by Industrial Fittings Sales Pty Ltd on 25 March 2009 and was accepted by the Chief Executive Officer of Customs (the CEO). Once the CEO was satisfied that the application met the core criteria outlined in section 269C of the Act, a TCO was issued. This order, declared in TCO No. 0910045 on 5 June 2009, specifies that these inflators are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995 (the Tariff), with the rate of duty reduced from the general rate of 5% to free.
Under the Act, the CEO must ensure that the application does not pertain to goods specified in section 269SJ, which are ineligible for a TCO. Additionally, the CEO must determine whether the application meets the core criteria, primarily that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. The definitions of key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269P of the Act, respectively. Once these criteria are satisfied, the CEO must issue a written TCO.
The Instrument imposes specific obligations on the parties involved. The CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested parties to submit objections or reasons why the TCO should not be made. In this instance, no submissions were received in response to the notice published for TCO No. 0910045. Furthermore, the TCO is taken to have come into force on the date the application was lodged, which is 25 March 2009. The rights of importers are beneficially affected by this order, as they may apply for a refund of duty on goods imported since the effective date of the TCO, under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person for actions taken before the date of registration.
Breach of the conditions or requirements under the Act can lead to various civil and criminal consequences. For instance, any party found to be in violation of the terms of the TCO may face penalties as prescribed by the relevant sections of the Act. The maximum penalties for such breaches can include fines, imprisonment, or both, depending on the severity and nature of the offence. Additionally, any misrepresentation or fraudulent application for a TCO may result in criminal charges under sections of the Crimes Act 1914. It is crucial for all parties to comply with the Act to avoid these potential legal repercussions.