EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0911154
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.
Joy Manufacturing Co applied for a TCO in respect of certain roof supports on 01 April 2009.
Instrument
TCO No 0911154 was made on 19 June 2009. It declares that those certain roof supports 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. 0911154 is taken to have come into force on 01 April 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. 0911154 was enacted under the Customs Act 1901 to provide a mechanism for tariff concessions on certain imported goods. This legislative instrument was introduced to address the gap in the existing tariff structure by enabling the Chief Executive Officer of Customs to apply reduced customs duties on specific goods, provided that no substitutable goods are produced in Australia. This mechanism allows for the consideration of applications from entities like Joy Manufacturing Co, which sought a tariff concession for roof supports, ensuring that such concessions are only granted when Australian production of equivalent goods does not exist. The objective of this legislation is to facilitate trade and support industry by reducing the cost of imported goods, thereby benefiting importers who can apply for duty refunds on goods imported since the effective date of the tariff concession.
The instrument was enacted by the Parliament of Australia and its policy objective is to streamline the process for obtaining tariff concessions, ensuring that the concessions are granted fairly and only when necessary to support Australian industries. The process involves an application to the CEO, public notice and opportunity for submissions, and the eventual issuance of a written order if the criteria are met. This approach ensures transparency and fairness in the application of tariff concessions, aligning with broader trade policy goals.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to individuals and entities seeking tariff concessions for specific goods, provided that the goods do not fall under the restricted categories specified in section 269SJ of the Act. The Act also applies to the process of assessing whether the goods in question are substitutable by products manufactured in Australia. The application of the Act is nationwide, encompassing the entire Commonwealth of Australia. Notably, the Act does not apply to goods that are explicitly excluded from tariff concessions. The application of the Act can be extended or refined through subordinate instruments, which allow for further specification and regulation of the tariff concession process. For instance, TCO No. 0911154, made on 19 June 2009, exemplifies the application of the Act by granting tariff concessions for certain roof supports, effective from 1 April 2009, as no substitutable goods were produced in Australia at the time of application. This order illustrates the practical implementation of the Act in reducing the customs duty rate from 5% to free for the specified goods.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0911154, are contained in the Customs Act 1901. Section 269F allows for the application of a Tariff Concession Order (TCO) by a person to the Chief Executive Officer (CEO) of Customs, which can result in a lower rate of customs duty on specified goods. Section 269C establishes the criteria that must be met for the TCO application to be considered valid, including the absence of substitutable goods produced in Australia on the date the application was lodged (Section 269D and 269E). If the CEO determines that these criteria are met, they must issue a TCO under Section 269P(3), as evidenced in this case by TCO No. 0911154, which was issued on 19 June 2009 for certain roof supports.
The Act imposes several obligations on the parties involved. The CEO of Customs has the responsibility to review the application and determine whether it meets the core criteria, as outlined in Section 269C. Additionally, the CEO must publish a notice in the Gazette, as required by Subsection 269K(1), inviting any interested party to submit a response if they believe the TCO should not be issued. This ensures transparency and provides an opportunity for stakeholders to voice any concerns. Once a TCO is issued, it comes into force on the date the application was lodged, as stipulated by Subsection 269S(1).
The legislation also outlines the consequences for any breaches of its provisions. Although specific offences and penalties are not detailed in this particular TCO, the Customs Act 1901, in general, provides for various civil and criminal penalties for non-compliance. For instance, under Section 269CA, engaging in conduct that results in the making of a false or misleading statement in a TCO application can result in substantial fines or imprisonment. The exact penalties can vary depending on the nature and severity of the breach but are designed to deter non-compliance and ensure the integrity of the tariff concession process.
Under the Customs Act 1901, any party found to have contravened the provisions of a TCO can face legal consequences. For example, wilfully making a false statement in a TCO application under Section 269CA can result in a penalty of up to five years imprisonment or a fine of up to 5,250 penalty units, or both, for individuals. For corporations, the penalties can be even more severe, with fines potentially reaching up to 26,250 penalty units. These penalties are intended to ensure that the tariff concession scheme operates fairly and that all parties adhere to the established rules and criteria. The seriousness of these penalties underscores the importance of compliance and the potential ramifications of any breaches.