EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910641
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.
Oi Australia Pty Ltd applied for a TCO in respect of certain moulds baffle spacers and inserts on 30 March 2009.
Instrument
TCO No 0910641 was made on 19 June 2009. It declares that those certain moulds baffle spacers and inserts 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. 0910641 is taken to have come into force on 30 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. 0910641, enacted in 2009, amends the Customs Act 1901 to provide tariff concessions on certain goods, specifically moulds baffle spacers and inserts, as applied for by Oi Australia Pty Ltd. This instrument was introduced to address the need for reduced customs duties on specific goods where no substitutable goods are produced in Australia, thereby fostering economic efficiency and competitiveness for the importer. The instrument was developed under the authority of the Customs Act 1901, with the policy objective of ensuring that the application of tariff concessions does not disadvantage any person and allows for the refund of duties paid prior to the instrument's effective date. The instrument was published in the Gazette with an invitation for submissions, though none were received, leading to the issuance of the tariff concession order.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) mechanism, applies to entities seeking lower rates of customs duty on specific goods, provided certain conditions are met. The application process is initiated by an entity lodging a request with the Chief Executive Officer of Customs (CEO), who assesses whether the application satisfies the core criteria, primarily that no substitutable goods are produced in Australia. Once a TCO is granted, the specified goods are subject to a reduced rate of duty as outlined in the Customs Tariff Act 1995, enhancing trade efficiency and potentially benefiting importers. The geographical scope of this legislation is national, as it pertains to goods entering Australia and operates under the jurisdiction of the Commonwealth. However, certain goods listed in section 269SJ of the Act are excluded from TCO eligibility. The application of the Act may be further refined or expanded through subordinate instruments, allowing for detailed regulation of the tariff concession process.
Key Provisions
The main operative sections of this legislation include section 269F, which allows for the application for a Tariff Concession Order (TCO), and section 269P(3), which mandates that if an application meets the core criteria, the Chief Executive Officer (CEO) of Customs must make a written order. Section 269C sets out the criteria that must be met for an application to be considered valid, ensuring that no substitutable goods were produced in Australia on the day the application was lodged. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made.
These sections impose several obligations on the parties involved. The CEO is required to determine whether an application meets the core criteria set out in the Act. This involves assessing whether there are any substitutable goods produced in Australia on the day the application was lodged. Once an application is accepted as valid, the CEO must publish a notice in the Gazette and consider any submissions received. The applicant, in this case Oi Australia Pty Ltd, must provide all necessary information and evidence to support their application for a TCO.
Failure to comply with the provisions of the Act can result in civil or criminal consequences. While the specific offences, penalties, or consequences for breach are not detailed in the explanatory statement, it is known that non-compliance with customs regulations can lead to penalties including fines and potential imprisonment. The maximum penalties for breaches of the Customs Act can vary widely depending on the nature and severity of the offence, but they may include significant financial penalties and imprisonment for serious violations.
The TCO does not impose any new liabilities on any person, but it does provide beneficial rights to importers who can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. This highlights the importance of adhering to the legislative requirements to ensure that all parties are aware of their rights and obligations under the Act. The commencement date of the TCO is the day on which the application was lodged, ensuring that the benefits of the concession are applicable from that date.