EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910398
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.
Orica Australia Pty Ltd applied for a TCO in respect of certain detonating cords on 27 March 2009.
Instrument
TCO No 0910398 was made on 19 June 2009. It declares that those certain detonating cords 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. 0910398 is taken to have come into force on 27 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 Parliament of Australia, provides a framework for administering customs duties and other import charges. This Act was introduced to facilitate trade by ensuring a standardised approach to the collection of customs duties and other related charges. One aspect of this Act involves the issuance of Tariff Concession Orders (TCOs) to provide relief from certain customs duties under specific conditions. The Tariff Concession Instrument No. 0910398, made in 2009, aims to provide a tariff concession for certain detonating cords, addressing the problem of potentially high customs duties on specific imported goods that have no Australian-made equivalents. The policy objective here is to support industries by reducing the cost of importing specific goods, thereby encouraging competitive pricing and market access for these products in Australia.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, thereby providing a lower rate of customs duty for certain goods. The application of this Act pertains to any person who wishes to apply for a TCO for goods, provided that the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. For a TCO to be granted, the CEO must be satisfied that the application meets the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this Act is national, as it applies across Australia under the Commonwealth jurisdiction. There are no exclusions explicitly mentioned in the text, but the process involves a public consultation period during which objections can be raised. This particular TCO, No. 0910398, concerning certain detonating cords, was made effective from 27 March 2009, the date of the application, and does not disadvantage any existing rights or impose new liabilities.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0910398 (the Instrument) under the Customs Act 1901 establish the framework for the application and issuance of Tariff Concession Orders (TCOs) (s 269F). This legislation allows for the application of a lower rate of customs duty on specified goods when certain criteria are met. Specifically, section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B provides definitions for key terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. If the Chief Executive Officer of Customs (the CEO) is satisfied that the application meets these criteria, they must make a written order (a TCO) (s 269P(3)).
The obligations imposed by this Act on the parties involved are primarily centred around the application and review process for TCOs. An applicant, such as Orica Australia Pty Ltd, must submit an application to the CEO, ensuring it pertains to goods not specified in section 269SJ of the Act, which lists those goods ineligible for a TCO. The CEO must then assess whether the application meets the core criteria and, if satisfied, issue a TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be granted (s 269K(1)). This notice and review process ensure transparency and allow for public input before the TCO is issued.
Failure to comply with the provisions of this Act can result in legal consequences. Although specific offences and penalties are not detailed in the explanatory statement, breaches of customs regulations generally attract significant penalties. Under the Customs Act 1901, unauthorised importation or exportation of goods can lead to fines and imprisonment. The maximum penalties for such offences can be substantial, reflecting the seriousness of non-compliance with customs regulations. Importers and exporters must ensure they adhere to the terms of any TCOs and the broader legislative framework to avoid these penalties.
The commencement of TCO No. 0910398 on 27 March 2009, the date the application was lodged, means that the reduced duty on the specified detonating cords applies from that date. This commencement date ensures that any duties paid on the goods prior to the TCO's effective date do not disadvantage the importer, and they can apply for a refund of the duty paid (Reg 126(1)(r)). The Act also ensures that the TCO does not impose any new liabilities on any person beyond the date of registration, protecting individuals and entities from retroactive financial burdens.