EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0911257
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.
Chemring Australia applied for a TCO in respect of certain bomb defusing tools on 02 April 2009.
Instrument
TCO No 0911257 was made on 26 June 2009. It declares that those certain bomb defusing tools 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. 0911257 is taken to have come into force on 02 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. 0911257, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods that are not produced domestically and hence do not have substitutable goods available in Australia. The instrument was developed to facilitate the import of certain bomb defusing tools by granting them a tariff concession, thus allowing Chemring Australia to import these tools without incurring the general customs duty. The instrument was established by the Chief Executive Officer of Customs, in accordance with the legislative framework that mandates the publication of an invitation for submissions in the Gazette, although no submissions were received in response to this notice. The policy objective of this instrument is to provide tariff relief on imported goods that are not domestically produced, thereby potentially benefiting importers by allowing them to apply for duty refunds on these goods.
Scope and Application
The Customs Act 1901, as outlined in the Explanatory Statement for Tariff Concession Instrument No. 0911257, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This scheme applies to any person who may apply to the CEO for a TCO in respect of goods, provided these goods are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The primary application of this legislation is to ensure that a lower rate of customs duty applies to goods that are the subject of a TCO, specifically where no substitutable goods are produced in Australia in the ordinary course of business. The instrument extends to the national jurisdiction of Australia and applies to any entity or individual involved in the importation of goods that meet the criteria for a TCO.
The Tariff Concession Order No. 0911257, made on 26 June 2009, exemplifies the application of this legislative scheme. It pertains to certain bomb defusing tools and declares that these goods are subject to a duty-free rate under item 50 of Schedule 4 to the Customs Tariff Act 1995. The CEO's decision to grant this TCO was based on the absence of substitutable goods produced in Australia, as per section 269C of the Customs Act 1901. This order does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person. Importers of these goods will benefit from the reduced duty rate and may also apply for a refund of duty on goods imported since the TCO was taken to have come into force on 02 April 2009. The TCO's geographic and jurisdictional reach is effectively nationwide, affecting all importers and entities involved in the importation of the specified goods.
Key Provisions
The main operative sections of this legislation (sections 269C, 269B, 269E, 269P, and 269K) establish the framework for Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows an application for a TCO to be made to the Chief Executive Officer of Customs (the CEO), who will then determine whether the application meets the core criteria specified in sections 269C and 269B. If the CEO is satisfied that the application meets these criteria, they must issue a TCO. The TCO, once issued, will apply a lower rate of customs duty on the specified goods, as outlined in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. The CEO is required to ensure that the application for a TCO is not in respect of goods specified in section 269SJ of the Act, which outlines the goods that cannot be subject to a TCO. Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as per subsection 269K(1). Additionally, the CEO must decide whether the application meets the core criteria, particularly ensuring that no substitutable goods were produced in Australia on the day the application was lodged, as stipulated in section 269C.
Failure to comply with the provisions of this Act can lead to various consequences. Although specific offences and penalties are not detailed within the text provided, the Act generally outlines that breaches may result in both civil and criminal penalties. Civil penalties may include fines or other monetary penalties, while criminal penalties could potentially lead to imprisonment. The maximum penalties would be determined based on the specific nature and severity of the breach, in accordance with other relevant sections of the Customs Act 1901 and associated regulations. Importers, however, benefit from the ability to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as outlined in paragraph 126(1)(r) of the Regulations.