EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910420
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.
Amalgamated Handware Merchants applied for a TCO in respect of certain radiators on 27 March 2009.
Instrument
TCO No 0910420 was made on 19 June 2009. It declares that those certain radiators 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. 0910420 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 was enacted by the Australian Parliament to facilitate the administration of customs duties and other import charges. Part XVA of the Act introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The 2009 Tariff Concession Instrument No. 0910420 was introduced to address the need for tariff concessions for certain goods. Amalgamated Handware Merchants applied for a TCO for certain radiators on 27 March 2009, which was subsequently approved on 19 June 2009. The policy objective is to provide tariff concessions where appropriate, facilitating trade and potentially benefiting importers by reducing duty charges on specified goods.
Scope and Application
The Customs Act 1901 provides a framework for the imposition of customs duty on imported goods, with a specific mechanism for tariff concession outlined in Part XVA. This Act applies to any person or entity seeking a reduction in customs duty for specific goods through the application for a Tariff Concession Order (TCO). The application process requires the applicant to demonstrate that no substitutable goods are produced in Australia in the ordinary course of business. If the Chief Executive Officer of Customs is satisfied that the application meets the core criteria, a TCO is issued, resulting in a lower or free customs duty rate for the specified goods. The application and issuance of TCOs are subject to public notice and comment, although in the case of TCO No. 0910420, no submissions were received. This particular TCO applies nationally and commenced on the date the application was lodged, 27 March 2009, without retroactively affecting any rights or imposing liabilities prior to its registration. The TCO only benefits the rights of importers by potentially allowing them to claim refunds of duty paid on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0910420 under the Customs Act 1901 (section 269F) allow for the application of Tariff Concession Orders (TCOs) by any person to the Chief Executive Officer of Customs (CEO). If the CEO determines that the application does not pertain to goods specified in section 269SJ and meets the core criteria as outlined in section 269C, a TCO can be made. The instrument, TCO No. 0910420, was made on 19 June 2009, and it applies to certain radiators by declaring them subject to a reduced customs duty rate, specifically item 50 of Schedule 4 to the Customs Tariff Act 1995, with the duty rate being free instead of the general rate of 5%.
The obligations imposed on parties under this Act are primarily on the CEO of Customs. Once a TCO application is received and deemed valid, the CEO must ensure it complies with the core criteria, which include verifying that no substitutable goods were produced in Australia at the time the application was lodged (section 269C). The CEO is also obligated to publish a notice in the Gazette inviting submissions from any person who may object to the TCO being made, as per subsection 269K(1). If no objections are received, the CEO must proceed to issue the TCO.
There are no specific offences, penalties, or consequences for breach outlined in this particular instrument. However, under the Customs Act 1901, breaches of customs regulations generally attract civil and criminal penalties. Civil penalties can include fines, and criminal penalties may include imprisonment, reflecting the severity of non-compliance with customs laws. For example, under section 238 of the Customs Act, the maximum penalty for knowingly making a false statement in a document required by the Act can be a fine of up to 10,000 penalty units or imprisonment for up to five years, or both. Similarly, under section 241, the maximum penalty for smuggling can be a fine of up to 210,000 penalty units or imprisonment for up to 25 years, or both. These provisions underscore the importance of adhering to the legal requirements set forth in the Customs Act.