EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0911262
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 fuse removal extractors on 02 April 2009.
Instrument
TCO No 0911262 was made on 26 June 2009. It declares that those certain fuse removal extractors 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. 0911262 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. 0911262 was enacted in 2009 under the Customs Act 1901 to address a specific need for tariff concessions on certain goods. This instrument was introduced by the Chief Executive Officer of Customs, who, pursuant to section 269F of the Act, has the authority to make Tariff Concession Orders (TCOs). These orders provide for a lower rate of customs duty on goods that meet specific criteria, which in this case, involved certain fuse removal extractors applied for by Chemring Australia. The policy objective behind this TCO was to ensure that goods for which no substitutable products are produced in Australia are subject to reduced duty rates, thereby supporting the importation and potentially the domestic production of these goods. The instrument was published in the Gazette with an invitation for submissions, though none were received, leading to the TCO being made effective from the date the application was lodged, 2 April 2009. This legislative action ensures that importers of these goods can benefit from a duty-free rate, while also safeguarding the rights of existing parties and avoiding any retroactive liabilities.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0911262, establishes a framework under which the Chief Executive Officer of Customs can grant tariff concessions to certain imported goods, effectively lowering the customs duty for those goods. This process applies to any person or entity that wishes to import goods that meet specific criteria, namely that no substitutable goods are produced in Australia in the ordinary course of business. The instrument was specifically applied to certain fuse removal extractors, which are now subject to a free rate of duty as opposed to the general rate of 5%. This concession is effective from the date the application was lodged, 02 April 2009, and does not retroactively affect any pre-existing rights or liabilities of importers or other entities. Importantly, this legislation does not impose any new liabilities on individuals or entities and allows for potential duty refunds for importers of the specified goods since the effective date of the concession.
Key Provisions
The primary sections of this legislation, specifically sections 269C, 269P, and 269S, are central to the operation of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269C of the Act establishes the core criteria that an application for a TCO must meet, requiring that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P outlines that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order, a TCO, declaring that the goods subject to the application are those to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269S details that a TCO is considered to have come into force on the day the application for the TCO was lodged. In this case, TCO No. 0911262, made on 26 June 2009, declares that certain fuse removal extractors are goods to which item 50 of Schedule 4 to the Tariff applies, resulting in a duty rate of free, down from the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO of Customs is tasked with deciding whether a TCO application meets the core criteria outlined in section 269C. Additionally, the CEO must publish a notice in the Gazette, inviting any person who believes the TCO should not be made to lodge a submission, as stipulated in subsection 269K(1) of the Act. Furthermore, applicants must ensure that their applications are lodged in accordance with the provisions of section 269F, which allows a person to apply for a TCO in respect of goods. If the CEO is satisfied with the application, they must make a written TCO as per section 269P(3). Importers of the goods subject to the TCO can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations.
The legislation also outlines potential consequences for non-compliance. While the explanatory statement does not explicitly state any penalties, breaches of the Customs Act 1901 can generally result in significant civil or criminal penalties. Under section 282 of the Act, a person who contravenes the Act or Regulations can be subject to penalties, which may include fines or imprisonment, depending on the severity of the breach. The maximum penalties for serious breaches can be substantial, reflecting the importance of compliance with customs regulations.